Written by Robert H. Ruth
This is a great question. It is too bad that there is no absolutely correct answer. The best response is “it depends on your circumstances”. Prior to diving into this topic, let’s identify:
Here are the basic aspects of each product.
- Both products feature fixed rates meaning the interest rate and payment will not change for the duration of the loan.
- The 30 year loan has a higher interest rate but a lower monthly payment. The lower payment increases a borrower’s affordability , but there is a tradeoff : the longer term means you will pay more interest over the life of the loan
- The 15 year loan will have a lower rate but a higher monthly payment. The higher payment may decrease your