The downside with a 15 year mortgage is that it has a higher monthly payment than a 30 year mortgage. A 15 year mortgage also allows you to own your home free and clear much faster than a 30 year mortgage. These two factors combined mean that the total interest paid over the length of the 15 year mortgage is much less than the 30 year mortgage. Since the duration of the loan is half that of the 30 year mortgage, you pay less interest over the course of loan, even if the interest rates were the same. With a 15 year mortgage, lenders usually offer a lower interest rate than 30 year loans. Read on to learn about the pros and cons of each mortgage type, and which one may be best for you. The key difference between these two mortgage types is the duration of the loan – you pay off the same initial loan amount over a period of either 15 years or 30 years. In second place is the 15 year fixed-rate mortgage, which is used by only about 6% of borrowers buying a home. The 30 year fixed-rate mortgage is by far the most popular loan type and is used by about 90% of borrowers buying a home according to Freddie Mac’s 2016 home buyer statistics. Overview of 15 Year Mortgage vs 30 Year MortgageĪmong the various types of mortgages, the 30 year and 15 year fixed rate mortgages are the most commonly used among borrowers purchasing a home. You can click on the 15 Year Loan Amortization Schedule or the 30 Year Loan Amortization Schedule tabs to view the breakdown of your payment towards principal and interest each month. Then, the calculator will automatically update the monthly payments and interest numbers. To use it, simply input your home purchase price, down payment percentage, and expected interest rate for each of the loan types. This calculator was designed to help you compare the monthly payments and total cost of a 15 year fixed-rate mortgage versus a 30 year fixed-rate mortgage. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.Use the calculator above to input the details of your home purchase and compare the monthly payments and total cost of a 15 year fixed-rate mortgage versus a 30 year fixed-rate mortgage. compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. We may also receive compensation if you click on certain links posted on our site. We may receive compensation from our partners for placement of their products or services.
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The only way to make sure you get the best rate for your mortgage is to compare lenders with your specific financial details for an accurate quote. Even different branches from a single lender might offer different rates for the same loan and borrower. But many borrowers don’t take the time to shop around for the best rate.Īnd as government surveys and studies have shown, interest rates offered between lenders can widely vary.