What are the pros and cons of a 15-year mortgage vs. a 30-year one? Let's compare them.
- Ends more quickly.
- You'll build equity sooner.
- You'll pay less in interest over the life of the loan.
- Larger monthly payments.
- You can't afford to buy as expensive a house, since the payments are larger.
- Flexibility: you can pay more when you have more and pay it off in fewer than 30 years.
- Smaller monthly payments.
- Since the payments are smaller, you can afford to buy more house.
- You'll pay more in interest over the life of the loan (often twice as much as with a 15-year mortgage).
- Takes longer to pay off.
Of course, there are many other considerations you need to mull over before making mortgage decisions -- whether you want a fixed-rate or adjustable-rate mortgage is just one, for example.