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Choosing the fixed-rate loan term that best suits your financial needs is imperative in deciding a mortgage budget. At Spire Financial (A Division of V.I.P. Mortgage Inc.), our loan team can help determine if 15-year mortgage is right for you. Several variables should be considered, including down payment size, home price compared to income and other debt, and overall cash flow considerations. Our loan experts are here to help guide your decision.
15-year mortgages are perfect for many different buyers because they reduce risk and deliver cost savings. Although monthly payments are higher, a 15-year fixed-rate loan generally equates to a lower interest rate compared to those associated with a longer-term loan. Shorter terms can equate to being mortgage-free faster, allowing reallocation of money when the loan is paid off.
When you pay more up front, it reduces the amount you owe, ensuring you get the best interest rates. While several factors are considered, rates on 15-year fixed-rate loans tend to be better, as there is less risk associated with the shortened term.
Due to a shorter payment schedule, home buyers with this type of financing will likely pay significantly less over the life of the loan than those with a longer-term option, helping them build equity faster. When you opt for a 15-year mortgage, a much larger portion of your payment goes toward paying the loan off instead of to interest (also known as bank profit).
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