Your Simple Guide To 30 And 15 Year Fixed Rate Mortgages

Your Simple Guide To 30 And 15 Year Fixed Rate Mortgages

Choosing between a 15-year fixed-rate mortgage and a 30-year fixed-rate mortgage is one of the most frequently pondered decisions when it comes to buying a home… as it should be! Financing your home purchase in a way that best suits your needs is extremely important, which is why I’ve taken fingers to keyboard to give you a breakdown of each option’s terms and how they compare.

Let’s start with the basics. A fixed rate mortgage loan requires the same interest rate and monthly payment for the duration of the loan term. The most common home loan is the 30-year fixed-rate mortgage as it is not only easy to wrap one’s head around, but is also the most financially manageable option. The 15-year fixed-rate mortgage is another common option, for those who are interested and able to pay off their loan more quickly.

The three main differences between the 30-year fixed and the 15-year fixed are:
  1. Loan Term Length
  2. Monthly Payment Amount
  3. Interest Rate
With a 15-year fixed, you are paying off your house in half the time, enabling you to build equity much more quickly. These also come with lower interest rates which, when coupled with a shorter loan term, means you pay significantly less in interest in the long run. On the other hand, it is more difficult to qualify for a 15-year fixed mortgage, you may not be able to buy as much house as you had hoped, or you may end up “house poor” due to the higher monthly payments.

The 30-year fixed-rate mortgage alleviates a lot of the drawbacks associated with the 15-year fixed. They are much easier to qualify for, you would likely be able to purchase more house, and monthly payments are quite a bit lower in most cases freeing up money to be saved or used elsewhere. Plus, you can make higher payments at any time. However, you will not own your home outright at the end of your 30-year fixed-rate mortgage, you will pay significantly more in interest over 30 years, and you will build equity very slowly, making it more difficult to refinance should have the desire.

And there you have it – both sides of the two most common home loans out there – short and simple. The strengths of one mirror the weaknesses of the other. So of course, when deciding which type of loan to enter into, only you know what will work for you. has a great mortgage calculator that allows you to input your mortgage cost and expected interest rates to compare the two options.  Or, if you’re ready to start your journey with some help from the professionals, contact Veto Kallarakal with Talmar Bank and Trust at 301.279.5129 today!

(Photo via

Stephanie Shum Anderson (Agent) Headshot
Phone: 301-466-5656
Dated: November 13th 2014
Views: 1,249
About Stephanie: She's a licensed agent in Virginia/Maryland and CRC Premier Properties' very own marketing maven. M...

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