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  • Rebecca Richardson - Mortgage Consultant

Should I Pick a 15 Year Mortgage or 30 Year Mortgage?


Many people think that having a 15 year mortgage is better than having a 30 year mortgage but in today’s blog, I want to go over several factors to consider when choosing the right option for you.



One of the pros of opting for a 30 year fixed mortgage, over a 15, is that it affords you payment flexibility.


You can choose to pay the 30 year payment, if you need to, if there’s a job loss or some other change in your budget and you want to have that flexibility. But you can also choose to pay more than that because everything extra that you pay for your mortgage does go to principal.


So, you can pay it just like a 15 year and help save all of that time and interest but still maintain the flexibility of a 30 year.


Another benefit of opting for a 30 year fixed, over a 15, is that it can make it easy for you later on if you’re trying to qualify for another large purchase.


For example, if you want to purchase a rental property or perhaps you’re ready to move on from that home and purchase another one, having a lower monthly payment will make it easier to qualify for the next investment.


But, there are drawbacks to the 30 year fixed mortgage as well. For example, it comes with a higher interest rate, typically about a quarter to half percent more than the 15 year option.

Opting for a 15 over mortgage over a 30 year can increase your saving potential.

The higher payment means that you will grow the equity in that home faster and you are going to save on interest.


We can look at this situation with an example. Let’s say you’re buying a home for $100,000.

A 30 year fixed mortgage with a 2.75% interest rate will lead to a minimum payment of $408 a month.


We can compare that to a 15 year fixed mortgage with a 2.25% interest rate where the minimum payment would be $655 per month.


As a general rule, payments for a 15-year fixed mortgage will be around 40% higher than if you were to go the 30 year route.


The nice part about choosing the 30-year payment model is you can pay anywhere between the 2 payments.


In our example, that means you can pay between $408 and $655, depending on your budget. Anything extra that you pay always goes to principal which cuts down on future interest and helps you build equity faster, while maintaining payment flexibility.


Ultimately, the right option for you is the one that will help you reach your homeownership and financial goals. So make sure you share those with your lender so they can help you choose the mortgage plan that is best for you.


Ready to start your home buying journey? If you have any additional questions about the best mortgage type for you - you can contact me by emailing (rebecca.richardson@wyndhamcapital.com) or finding me on Instagram (@the.mortgage.mentor).

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