Paying a loan in half the time does NOT mean making double payments. In fact, many homeowners are surprised at how little they need to pay on a shorter length loan.
\nFor decades, the 30-year mortgage was the standard when it came to financing a home purchase. But, in recent years, the 15-year, fixed-rate mortgage has become popular for a couple of reasons.
\nOne advantage of the 15-year fixed is that a shorter term can mean lower rates. Today\u2019s interest rates are historically low at around 3.9% to 4.5%, so they aren\u2019t the make-or-break issue they were, say, in the 1980s when the interest rate could easily top 12%. But interest rates count.
\nAnother advantage isn\u2019t as easy to see. On a 30-year $100,000 loan financed at 3.9%, the payment would be a very affordable $473. On a 15-year loan, the payment rises to $736, still likely affordable.
\nSo, why not just take the lower payment for 30 years? Because nestled within that lower payment, is a big stack of money. On that $100,000 loan over 30 years, you pay nearly $70,000 in interest. That\u2019s real money. On the 15-year note, you pay less than half of that: about $32,000.
\nThe question for the buyer is whether to shop around for a lower-priced property overall (in order to make the 15-year numbers work), or buy something more expensive with features that make the 30-year mortgage more attractive.<\/p>\n","protected":false},"excerpt":{"rendered":"
Paying a loan in half the time does NOT mean making double payments. In fact, many homeowners are surprised at how little they need to pay on a shorter length loan. For decades, the 30-year mortgage was the standard when it came to financing a home purchase. But, in recent years, the 15-year, fixed-rate mortgage […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[32,1,4],"tags":[],"class_list":["post-1258","post","type-post","status-publish","format-standard","hentry","category-general","category-insurance","category-quote-and-compare"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.insure-us.org\/blog\/wp-json\/wp\/v2\/posts\/1258","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.insure-us.org\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.insure-us.org\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.insure-us.org\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.insure-us.org\/blog\/wp-json\/wp\/v2\/comments?post=1258"}],"version-history":[{"count":1,"href":"https:\/\/www.insure-us.org\/blog\/wp-json\/wp\/v2\/posts\/1258\/revisions"}],"predecessor-version":[{"id":1259,"href":"https:\/\/www.insure-us.org\/blog\/wp-json\/wp\/v2\/posts\/1258\/revisions\/1259"}],"wp:attachment":[{"href":"https:\/\/www.insure-us.org\/blog\/wp-json\/wp\/v2\/media?parent=1258"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.insure-us.org\/blog\/wp-json\/wp\/v2\/categories?post=1258"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.insure-us.org\/blog\/wp-json\/wp\/v2\/tags?post=1258"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}