I know that there are a million different mortgage variations. The most popular is definitely the fixed mortgage.
The ultimate question is: Should I get a shorter term mortgage or a longer term? Here are some basic pros and cons with a shorter length mortgage (15 years) vs. a longer length mortgage (30 years).
Pros of a 30 year mortgage:
- You have “up to” 30 years to pay off the mortgage. If you have the extra cash, you have the option to throw more money at it.
- You have smaller monthly payments. You can use the extra money to feed your kids.
Cons of a 30 year mortgage:
- You pay nearly twice as much interest compared to a 15 year mortgage.
- It takes longer to pay off the mortgage.
- It takes longer to build equity.
Pros of a 15 year mortgage:
- You pay less interest over the life of the mortgage.
- The mortgage ends quicker.
- You build equity much faster.
Cons of a 15 year mortgage:
- Your monthly payments are larger.
- You have less time to pay off the mortgage.