13 Reasons You Should Get a 15-Year Mortgage

When it comes to taking out a mortgage, you have choices. You can sign a 30-year loan, which is a popular borrowing route to take, or you could sign a 15-year mortgage. Here are some good reasons to go with the latter.

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Although mortgage rates are still pretty low from a historical standpoint, they're higher this year than last year. If you sign a 15-year mortgage, you'll enjoy a lower interest rate than what a 30-year loan will give you.

ALSO READ: Current Mortgage Rates: Still Competitive Today

If you don't relish the idea of spending tons of money on mortgage interest, it pays to opt for a 15-year loan. You'll save money on interest by virtue of not just a lower rate but also a shorter repayment period.

Equity refers to the portion of your home that you own outright, and it's something you can borrow against as needed. By repaying your mortgage faster, you can build up equity more quickly.

ALSO READ: Should You Get a Home Equity Loan in 2022?

A 15-year mortgage could make it possible to pay off your home at a relatively young age. And that could mean freeing up money to pay for other important things, like your kids' college education or your retirement.

Many people aim to have their homes paid off in time for retirement. If you're buying a home later in life, a 15-year mortgage could make that possible, whereas if you take out a 30-year loan, you may not manage to meet that goal.

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Some people take out a 30-year mortgage with the goal of accelerating their repayment schedule. But if you don't trust yourself to put extra money into your mortgage to pay it off sooner, you may want to sign a 15-year loan instead.

ALSO READ: Does a 30-Year Mortgage Make Sense in 2022?

If you're buying a home at the low end of your price range, you may be able to comfortably swing the higher monthly payments that come with a 15-year mortgage. And in that case, you might as well go that route to save money on interest and get rid of your housing debt sooner.

ALSO READ: How Much House Can I Afford?

Some homebuyers have to keep their mortgage payments on the low side to compensate for costly property taxes. But if you're buying someplace where taxes are low, you may have room in your budget for the higher monthly payments that come with a 15-year mortgage.

Even though mortgage debt is considered a healthy type to have, some people just don't like the idea of being weighed down with debt payments. If that's your mindset, then paying off your home sooner could improve your general financial outlook.

Many homebuyers who sign a 30-year mortgage feel compelled to push themselves to make extra payments on their loans. But if you take out a 15-year mortgage, that alone might take the pressure off.

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Some people are natural savers, while others struggle to sock money away. If you're in the latter boat, a 15-year mortgage can serve as a type of forced savings. And that could end up being a good thing for your finances overall.

ALSO READ: 3 Ways to Save Money on Everyday Costs, Even During Inflation

Homes cost money to maintain. But if you're very handy and are willing to take on a lot of that upkeep yourself, you may not end up spending so much on maintenance. And that means a higher monthly mortgage payment may be more doable for you.

ALSO READ: Here's What the Average American Spends on Home Maintenance

The higher monthly payments that come with a 15-year mortgage could become harder to manage through the years. But remember, you can always refinance a 15-year loan into a longer-term loan if the need arises. So, if you feel you can swing a 15-year mortgage in the near term, it may be worth doing.

There are pros and cons to getting a 15-year mortgage. While you'll enjoy the benefits above, you may not love the idea of having higher monthly payments to deal with. Ultimately, you'll need to weigh the advantages of a 15-year mortgage against the drawbacks to see what's right for you.

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