June Mortgage Update

Do you want lower monthly payments now or do you want to pay off your home faster? i'm That’s one of the primary questions to answer when deciding between a 30-year fixed mortgage or a 15-year fixed mortgage.

15-Year Mortgage

You have 15 years to pay off the full amount borrowed. Monthly payments are higher, but the interest rate is lower, the cost of the loan is less in the long run and the mortgage is paid off sooner.

30-Year Mortgage

Monthly payments are lower because they’re spread out over 30 years. Lower monthly payments can make it easier to afford the home you want, or give you more money to spend on other expenses or even use the extra cash to invest. However, you end up paying more interest over the life of the loan.

Comparing Both

Here’s the difference between mortgage payments and costsusing a hypothetical example of a $300,000 mortgage with a 5% interest rate (the actual rate would likely be lower for a 15-year):

15-year fixed-Term

$2,372.38-Monthly Payment

$127,028.56-Total Interest Paid

$427,028.56-Total Cost of Mortgage

30-year fixed-Term

$1,610.46-Monthly Payment

$279,767.35-Total Interest Paid

$579,767.35-Total Cost of Mortgage