30 year vs 15 year mortgage | Yakezie Reader Insights | Yakezie Forums

Hi all,

Lot of questions lately.  Thanks everyone!  If you were shopping around for a home, would you get a 30 year or 15 year mortgage? 

I had both, although I currently have a 15 year mortgage.  There pros and cons to both.  The 15 year has a better interest rate, but the payment will be higher and the interest write off is lower.  It depends on your particular circumstances and goals.  If you get a 30 year, you can accelerate it, but you are paying a higher rate.

The answer is- it depends. It's a tough call to make without specifics (amount of loan, value
of home, income, etc.).

In most cases, I'd probably go with a 30 year mortgage and double
the payments each month to pay it off early. But I'd double the FULL
monthly payment (including taxes & insurance) to accelerate the
payoff. On a 200k loan (5% interest), you'd save almost enough in
interest to buy another home or investment property (approximately
$144,337 – source: Quicken Loans Calculator)!

15 year has been my preference.  Most who say they will pay extra don't.  If you can truly pay extra and stick to it, then the 30 year does give you flexibility.  I like the fact that you build equity quicker in the 15 year, and in this day and age that might allow you to sell the home if you need to.

I also recently refinanced into a 15 year mortgage.  I believe it comes down to personal preference and your current financial situation.  I went with the 15 year because I already invest enough in other areas to meet my investment goals.  I also have a personal goal to own my home before 40.  So, the 15 year made sense in my situation.

20sFinances said:

Good question (as always)…

 

I think it depends on your financial situation. If you are killing it with the income and have a secure job (if that's even possible these days), why not go for the 15.

 

But, if there is even the slightest risk, I would say go for the 30 because of the flexibility and the idea that because rates are so low, you can probably find a better investment for that extra money.

Get out my head!!!

great question – I agree with a lot of the points here, but dr deans resonates – I think a lot of people who say they would/could pay extra dont end up doing so very often.  I'd much rather give a 15 year loan a shot and scrimp until my salary goes up than go for a 30 year.  That being said, I do have a very stable job, and I know that's not true for everyone these days.

Great replies above. I would go for the 30 years loan because the interest rate is so low.

Houses are expensive in California so that will be a factor as well since many people may not be able to afford the 15 years payment.

I'd go with 15 any day as long as I knew I could afford it. I think there's something to be said for forcing yourself to pay down the debt as fast as possible. However, with interest rates so low right now, there are definitely arguments for taking the 30 year

Miss T @ Prairie Eco-Thrifter said:

In Canada, at least where I live, you can't even get a 30 year mortgage plan. Max is 5 years  based on 25 or 20 years amortization. It is so different in the states.

Wow, I've never heard this.  What does that mean exactly?  Do you  have to re-finance every five years?