The Pros and Cons When Considering a 15-Year Mortgage

Many borrowers and aspiring homeowners assume that they’ll be making mortgage payments for a full 30 years. While the 30-year mortgage has long been the standard, it’s important to know that other options exist—including one that cuts the standard loan term in half. Of course, we’re talking about the 15-year mortgage, and while it isn’t for everyone, it has some substantial benefits to consider.

In this post, we’re going to look at some of the pros and cons of choosing a 15-year mortgage over a 30-year note. However, the smartest way to make this decision is to talk with a loan professional, one who can help connect you with a loan product that makes the most sense for your financial goals and needs.

The Pros of a 15-Year Mortgage

The main reason to choose a 15-year mortgage is that it costs you less money in the long haul. That’s because interest rates are calculated on the basis of the full term you’re borrowing—but if you’re borrowing for half as much time, that means you’ll have much less interest to pay. The total expense of a 15-year mortgage is much less than the total expense of a 30-year, even if the mortgage principal is the same.

The Cons of a 15-Year Mortgage

Though the overall cost of the mortgage is lower, the monthly payments will surely be higher—simply because you’re condensing those payments into a shorter time frame, rather than spacing them out. This in itself can be a blessing in disguise, though; financial planners call it forced savings, meaning you’re left with little choice but to invest a big part of your monthly paycheck into an investment that will appreciate over time—that is, home equity. This level of financial discipline, while frustrating at times, may be something you’re grateful for down the road.

Making a Sound Choice in Your Mortgage Term

The bottom line is when you choose a mortgage product, you have to weigh many factors, including the loan term. To make the right decision, we recommend working with a seasoned home loan expert. Loan Fleet’s team of mortgage advisors more than fit the bill.

We’d love to answer any questions you have about loan terms, interest rates, or whether a 15-year schedule of payments is the best fit for you. Start that conversation today by reaching out to the Loan Fleet team now.