15 Year vs. 30 Year Mortgage

Weighing a 15 year vs 30 year mortgage can be difficult. Several factors must be weighed – chief among these is how you will pay back the principal, or the original amount of money you borrowed.

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Pros and Cons of Mortgage Terms

Mortgage loans offer flexible terms and competitive rates. Whether you’re buying a home or looking to refinance, Strong Home Mortgage is here to help you explore your options, understand interest rates, and secure a loan that fits your financial goals. Let’s take a closer look at the pros and cons of a 15 year vs 30 year mortgage, as well as a key questions to ask yourself.

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Weighing your Options

Do you have an emergency fund already established?
How close are you to retirement?
Have you maxed out your retirement plan contribution?
Do you have any high-interest debt? If so, how much?
Are you relying on one or two incomes to support your monthly mortgage payments?
What can you comfortably afford?
What are your financial goals?

30 Year Mortgage

A 30-year fixed-rate mortgage may be ideal for those with more moderate income and plenty of working years ahead of them. Monthly payments on a 30-year mortgage are smaller because the loan term is longer.

Upside

Afford a little more home, when an extra bedroom or utility space would better suit your needs.

Use the monthly savings to:

Build an emergency fund to cover loss of income or other life-changing event
Make monthly contributions toward other investments, including retirement

Gain the flexibility of making extra payments toward the principal — on your terms, including payoff in 15 years, depending on the number of additional payments you can make each year

Downside

You will pay more in interest over the life of the loan

You will build equity at a slower rate because more of your payment goes towards interest

You will make mortgage payments for as many as 15 more years, depending on whether you make any extra payments

You will likely absorb a higher interest rate on a 30-year mortgage than a 15-year mortgage

You could potentially convince yourself to “take on too much house,” possibly right up to your debt-to-income (DTI) limit, with very little or no money remaining to invest elsewhere

15 Year Mortgage

A 15-year mortgage may be suitable for those who’ve already maxed out retirement contributions, plus have a nest egg and no other high-interest debt. Monthly payments on a 15-year vs. 30-year mortgage are higher because the loan term is shorter.

Upside

Generally, enjoy lower interest rates because the loan is less risky for the lender

Apply more of your monthly payment to the principal

Complete loan repayment in half the time

Build equity faster and have the option to take out a home equity loan or line of credit for other investments

Downside

You would commit to a higher monthly payment for the life of the loan.

You would have less money for other investments such as a retirement account.

You would have less of a cushion to absorb loss of income or other significant life changes.

15 vs. 30 Year Mortgage

Connect with a loan officer for answers to your questions and to explore lending options on a 15-year vs. 30-year mortgage loan.

Simple Steps to Secure Your Conventional Loan

Consultation — Speak with one of our loan officers to discuss your loan options
Submit Documents — Upload your financial records securely through our portal
Underwriter Review — An underwriter reviews your eligibility
Approval — Finalize your loan terms
Close with Confidence — Our team ensures a smooth, on-time closing process

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