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.
- What Is a Mortgage?
- What Type of Loan Should I Get for My Home?
- What Are the Different Types of Mortgage Loans?
- What Is the Process of Applying for a Mortgage?
- What Is the Difference Between a Housing Loan and a Mortgage Loan?
- What Is the Difference Between Government-Insured Loans and Conventional Loans?
- What Is a Down Payment?
- How Much Down Payment Will I Need to Provide?
- Are There Any Mortgage Loans with No Down Payment?
- What Is an Escrow Account?
- What Is Home Equity?
- What Is the Difference Between a Loan and a Mortgage?
- How Do Mortgages Work?
- Where Can I Get a Mortgage?
- What Should I Look for in a Mortgage?
- Should I Pay My Mortgage Early?
- What Is the Average Mortgage Length?
- What Are the Advantages of a 15-Year Mortgage over a 30-Year Mortgage?