Is there any advantage to getting a 15 year fixed mortgage?

Question by Spiderspider: Is there any advantage to getting a 15 year fixed mortgage?
If I sent in a little more money to my current 30 year mortgage so that it was paid off on the same timetable as the 15 year, am I better off rather than spending money on closing costs? Or does the 15 year mortgage give you a lower interest rate and therefore make it worth the cost and hassle of refinancing?

Best answer:

Answer by glenn
Often a 15 year mortgage has a slightly lower interest rate than a 30 year- but not always. If I am buying a house today I would get a thirty year loan and make the payments as if it was a 15 year loan so that I have a fall-back option if anything gets rough. If you feel very comfortable with the 15 year payments and might even make extra payments to pay it off in ten years then I might take a 15 year loan.

Add your own answer in the comments!

This entry was posted in Q&A and tagged , , , , , . Bookmark the permalink.

3 Responses to Is there any advantage to getting a 15 year fixed mortgage?

  1. Judy says:

    You normally would get a lower interest rate on a 15 yr fixed than on a 30 yr fixed, but calculate the savings to be sure it’s worth it.

  2. Jacob says:

    One of the main advantages is you save a great deal of money on interest when you take a shorter loan. However, this also means that you will pay more each month. As a rule of thumb, with a 30 year mortgage, you usually pay at least 100% of the cost of the home in interest. If you use a 15 year mortgage, you will pay much less in interest and sometimes will get a slightly lower interest rate.

    With that said, if you can pay off a 30 year mortgage in 15 years, you will usually come out on top.

  3. Ben Brashen says:

    The advantages of getting a 15-year-fixed-rate mortgage are a substantial savings on interest, faster equity buildup, and typically a lower rate. This type of loan isn’t for everyone, however. Figure out your budget and make sure that you would always be able to make the payments.

Leave a Reply

Your email address will not be published. Required fields are marked *