The Pros and Cons of a 15Year Mortgage
Advantages of a 15-Year
Mortgage
Here are some of the advantages of a 15year mortgage.
• Less in Total Interest
• Lower Interest Rate
• Lower Fees
• Forced Savings
Example of a 15-Year
Mortgage
A mortgage sum of $250,000 over 30 years
at a rate of 4% would cost $429,674 in
principal and interest payments by the end
of the loan, and the total interest would be
$179,674. The same loan and interest rate
over 15 years would cost $332,860 by the
end of the term, with a total interest of
$82,860.
Why Should I Get a 15-Year
Fixed-Rate Mortgage Instead
of a 30-Year?
If you think you can afford a larger monthly
payment that comes with a 15-year fixed
mortgage, it may help you pay off the
property, freeing up funds for retirement.
You will spend less in interest over the life
of the loan compared to a 30-year
mortgage.
What Are the Differences
Between 15-Year and 30Year Mortgages?
The monthly payments of a 15-year fixed
mortgage are higher than a 30-year
mortgage. The latter allows a borrower to
stretch out payments over a long time and
keep more of their monthly earnings.
However, you have to pay more interest.
How Do I Pay Off a 30-Year
Mortgage in 15 Years?
There are a couple of ways to pay down a
30-year mortgage in 15 years. First of all,
you may consider refinancing your current
mortgage into a 15-year mortgage.
Alternatively, you can make extra payments
towards the principal amount or make
biweekly payments equal to an extra
mortgage payment per year.
Thank You
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