What Are the Advantages of a 30-Year Mortgage over a 15-Year Mortgage?

A 30-year mortgage has three major advantages over a 15-year mortgage:

First, a 30-year mortgage requires lower average monthly payments than a 15-year mortgage, since the payments are spread out over a longer term. The resulting short-term savings may be used for other purposes.

Second, if you are able to repay earlier and decide to spend extra money paying down your loan, you can convert a 30-year mortgage to a shorter-term mortgage at any point in the mortgage period. However you cannot change the 15-year mortgage to a 30-year mortgage.

Third, a 30-year mortgage allows you to put the short-term savings to work to earn additional income through investing. Alternatively, you could put the extra savings into a retirement account.