Should you go with a 15-year fixed or 30-year fixed mortgage?
Prospect Home Finance
Prospect Home Finance CA
Published on April 5, 2021

Should you go with a 15-year fixed or 30-year fixed mortgage?

Although the United States’ most popular mortgage is the 30-year fixed-rate mortgage, it’s not your only option.

There are several factors to consider when deciding how long you want to spend paying off your mortgage. It may seem obvious to base this choice on the best interest rate and lowest monthly payment, but there are a number of other factors that affect your financial future.

You’ll need to evaluate your personal finances and understand your ability to keep up with payments. Let’s go over the benefits of both loan terms.

Benefits of 15-Year Mortgages

The main advantage of a 15-year mortgage is all the money you’ll save on interest, since you’re paying on it for only half as long as a 30-year mortgage. The other obvious benefit is that you’ll own your home in 15 years; you’ll be free of mortgage payments after that.

With a 15-year mortgage, you also build equity in your home quicker. Home equity is the portion of your property that you truly own. It’s the difference between what your home is worth and what’s left on the loan. That means you could tap into your home’s equity sooner for things like home renovations or repairs, either by refinancing to take cash out or a second mortgage.

Benefits of 30-Year Mortgages

The 30-year mortgage has consistently been the favorite among homeowners for its lower monthly payment. Though more of your money goes to interest and you pay for twice the length of time compared to a 15-year term, the advantages of a lower monthly payment can’t be overlooked.

Budgets tend to vary for many families. The costs of education, clothes, food, utilities and a need to save and invest can all vary each month. A lower mortgage payment means you can put more away for retirement, college funds and home repairs.

A 30-year mortgage could allow you to afford more physical property than a 15-year mortgage. If you need a bigger mortgage to buy a larger home, taking 30 years to pay it off would give you the freedom to make this purchase. It might not be possible if you only had 15 years to pay off the loan.


Remember, mortgage length is more than the simple question of how long you want to make payments. Is your budget relatively fixed or does it fluctuate? How much of your monthly income do you want to put toward payments? What do you expect your life to look like 5 to 15 years down the road? Assessing your monthly budget and long-term goals will help you decide whether a 15-year or 30-year term is right for you.

Prospect Home Finance
Prospect Home Finance CA
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