Choosing Between a 15-Year and 30-Year Mortgage

Some homebuyers are fortunate enough that they can purchase their property outright, buying the whole thing in cash. The vast majority of homeowners need a little help from a bank or lender, in the form of a home mortgage.

As you consider your home mortgage needs, it can’t be stressed enough that it pays to shop around. There are a lot of mortgage products out there, some more flexible and more affordable than others, and it’s important to do your research before choosing your lender.

As you look at different mortgages, one of the biggest decisions you’ll face is whether you get a 15-year loan or a 30-year loan. You can probably guess what the differences are just based on their names; a 15-year mortgage is one you can pay off completely in a decade and a half, owning your house free and clear once the final payment is made. A 30-year mortgage will take twice as long for you to pay it off.

So which one’s right for you? There are a number of factors to consider.

Picking the Right Mortgage

As you look for the right kind of mortgage, here are some considerations to make.

  1. The timeline. The most obvious aspect is the timeline itself; obviously, most borrowers would prefer to be out of debt to their lender sooner rather than later. So, all else being equal, the 15-year mortgage tends to be the most appealing.
  2. The overall cost. Another reason why the 15-year mortgage is enticing? It will actually cost you less money over the long haul. This has everything to do with interest; simply put, paying interest for 30 years is going to run higher than paying interest for 15 years. The cost of the home is the same in either scenario, but the compounding interest can be quite different.
  3. Monthly payments. The trick, of course, is that if you take out a mortgage for $200,000, paying it off over the course of 15 years will mean much higher monthly payments than if you spread it over 30 years. This is where the rubber meets the road for most borrowers; it’s important to calculate what your actual monthly payments would be, as you may find that the 15-year mortgage just isn’t affordable.
  4. Flexibility. Because 30-year mortgages tend to have lower monthly payments, you’ll have a little more financial flexibility, which may come in handy as you start thinking about basic home maintenance expenses. Again, this is ultimately where a lot of borrowers come down on the side of month-to-month ease, even if it means paying more over the life of the loan.
  5. Equity. Another issue to consider is how quickly you can start building actual equity in the home, which will be vital if you plan to resell it. With a 15-year mortgage, you’ll start accruing that equity at a much faster rate.

Ultimately, there’s not necessarily one right answer. It all comes down to your unique financial situation and homeownership needs. As you think through the best decision for you and your family, some things to keep in mind include:

  • Your current monthly budget; how much of a payment can you actually afford?
  • Your long-term plans; how long do you plan to stay in the house? How quickly do you need to establish equity? When will you try to get the house sold?
  • Other financial demands; do you need a little additional flexibility for other big expenses?
  • The lifetime cost of the loan; remember that a 15-year mortgage will generally cost you less money in the scheme of things.

Consider all of these factors as you look for the right mortgage term.

Get Help Selling Your Own Property

And, if you’re on the other side of the equation and are actually looking to get your place sold, take a moment to claim your seller’s report. It’s available to you for free via

In ii, you’ll get tips for selling your own property, including a recommendation for whether you should list with an agent, sell to an investor, or something else.

Claim your free seller’s report from and take the first step toward accomplishing your real estate goals.