Who Should Consider a 15-Year Mortgage?

The 15-year mortgage is more desirable amongst young homeowners with a healthy disposable income that may want to pay off their house before their children start college. Other homeowners who have higher incomes would like to finance a 15-year mortgage so that they can retire without worrying about having a mortgage payment. It depends on your income and where you see yourself in the future.

What are the advantages and disadvantages of a 15-Year Mortgage?

The 15-year fixed-rate mortgage offers two big advantages for most borrowers:

1. You own your home in half the time it would take with a traditional 30-year mortgage.

2. You save more than half the amount of interest of a 30-year mortgage. Lenders usually offer this mortgage at a slightly lower interest rate than with 30-year loans - typically up to .5% lower. This lower interest rate added to the shorter loan span creates actual savings for 15-year fixed rate borrowers.

The possible disadvantages associated with a 15-year fixed-rate mortgage are:

1. The monthly payments for a 15-year are roughly 10 percent to 15 percent higher per month than a 30-year.

2. Because you'll pay less total interest on the 15-year fixed-rate mortgage, you won't have the maximum mortgage interest tax deduction possible.