15 year vs 30 year mortgage – Which is better? In this video, I discuss the pros and cons of the 30 year mortgage vs 15 year mortgage and give you somethings to consider if you are unsure which is the right loan for you.
What are the pros and cons of a 15 vs 30 year mortgage?
✅ Shorter Term Loan – You can pay it off sooner
✅ Less Interest Paid over the term of the loan
✅ Typically a lower interest rate
❌ Higher monthly payments
❌ You can never pay less than your monthly payment whereas if you were doing a 30 year mortgage and paying it down like a 15 year mortgage based on an amortization schedule. You could always revert back to paying a 30 year fixed payment if finances got tough or you need to use that money for something else that month.
What are the pros and cons of a 30 vs 15 year mortgage?
✅ Lower Monthly Payment
✅ You can use an amortization schedule and pay it down like a 15 year mortgage with the flexibility of paying the 30 year mortgage payment if needed
❌ More interest paid over the life of the loan
❌ Takes longer to pay it off
How to pay off mortgage early – You can pay off your mortgage early by paying additional principal payments on the loan. If you pay 1 additional payment each year, your loan will be shortened to almost 26 years. You can make that payment by dividing your mortgage payment by 12 and added that amount to each payment, make bi-weekly payments or just make 1 additional payment each year.
A mortgage broker should be able to provide you with an amortization schedule that will show how making extra payments will help you pay off your mortgage sooner.
Please let me know your thoughts on the 30 year mortgage vs 15 year mortgage? After watching this video, do you believe a 30 year mortgage or a 15 year mortgage is the right loan for you?
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