Many homeowners looking to refinance or buy a home, but are looking for a very low interest rate may want to consider a 15-year fixed rate mortgage. While the 30-year fixed rate mortgage is common among many homeowners, there are benefits of the 15-year fixed rate mortgage that may make this mortgage a better option for some homeowners.
The 15-year fixed rate mortgage comes with a much lower interest rate, and obviously, a shorter life. The shorter life on this mortgage, coupled with the low interest rate, makes this mortgage cheaper over the long run. Many people that get a 30-year mortgage will end up paying almost double the value of their home loan, due to interest, but the 15-year mortgage makes a home loan much cheaper over the life of the mortgage.
The drawback of the 15-year fixed rate mortgage is it comes with a higher monthly payment. Homeowners with a 15-year fixed mortgage will have to meet a higher mortgage payment each month, but it comes down to if you want to pay more monthly and save on interest over the life of the mortgage or if you want to pay less each month and more over the long run.
Choosing what type of mortgage you get is going to needs to be grounded in your personal financial situation. Take the time to look at what different mortgages entail over the long and short-term, look at where you are financially, and then make a decision that is going to be in your best interest.