
Whether you’re a first-time homebuyer, a veteran setting down roots, or a growing family looking for more space, choosing the right mortgage is essential. First, you’ll have to decide which loan term is better for you — 30 years or 15 years. Thirty-year mortgages have lower monthly payments, but cost more in the long run. Fifteen-year loans allow you to build equity faster and pay off your mortgage sooner, but come with high monthly payments that may put a strain on your finances.
Here’s a closer look at both to help you make the right decision for your situation.
30-year mortgages
Most homeowners choose 30-year fixed-rate loans because they have long repayment periods and interest rates that don’t fluctuate. The long term will help make your monthly payments affordable, while the consistent interest rate will make it easy to budget for your mortgage costs. You can also get a 30-year loan with an adjustable interest rate that changes based on market trends. This type of loan is less popular, however, because it has monthly payments that may increase over time.
To help you decide if a 30-year loan term is right for you, here are some of its benefits:
30-year mortgage loan pros
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Lower monthly payments.
Thirty-year mortgages may be more affordable for first-time home buyers because of their lower monthly payments.
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More flexibility.
Going with this type of mortgage will give you extra financial flexibility. You can use the money you’ll save on mortgage payments to build your savings or take a family vacation. And if you want to pay off your loan faster, you can always make extra payments.
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Additional tax deductions.
You’ll be able to deduct more mortgage interest from your taxes with a 30-year loan and claim the deduction for longer.
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Qualify for bigger loans.
Home buyers can typically qualify for a larger loan amount if they go with this type of mortgage instead of a 15-year loan.
30-year mortgage loan cons
Thirty-year mortgages have lots of advantages, which is why they’re more common among buyers. However, they also have a few downsides you should know about.
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Higher interest costs.
Lenders charge higher interest rates for 30-year mortgages, which increases the amount of interest you’ll pay over the life of the loan. You’ll also be paying interest over 30 years instead of 15, which raises your total interest costs even more.
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Harder to build equity.
Thirty-year mortgages come with lower monthly payments and higher interest costs. This makes it harder to build equity, especially during the first few years of the loan, when you’re paying the most interest.
Because 30-year loans are more affordable, they’re easier to qualify for, which could help you get into a home and out of your rental sooner. On the other hand, you can expect to pay higher interest costs in exchange for the lower monthly payments.

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15-year mortgages
Fifteen-year mortgages are a good option for home buyers who can afford to make larger mortgage payments. They cost more in the short-term because they have higher monthly payments, but will save you money on interest in the long run. Here are some of the main benefits of going with a 15-year mortgage.
15-year mortgage pros
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Lower interest rates.
You can get an interest rate that’s up to 1% lower just by choosing a 15-year loan.
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Build equity faster.
Fifteen-year loans allow you to pay down your principal and build equity faster by making larger monthly mortgage payments.
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Lower total cost.
Because this type of loan has a shorter repayment period and a lower interest rate, you could save thousands of dollars in interest by choosing it.
15-year mortgage cons
Although 15-year loans are a great option for home buyers who want to save on interest costs, there are some negatives to consider, including:
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Bigger mortgage payments.
Fifteen-year loans have higher monthly mortgage payments that could stretch your budget.
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Qualifying for less.
You may qualify for a smaller loan amount if you choose a 15-year mortgage. So if you need a larger house for your growing family, a 30-year loan may be a better option.
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Less financial flexibility.
If you’re paying a higher monthly mortgage payment, you might not be able to allocate as much money toward other financial goals like retirement.
So is a 15-year mortgage worth it? You’ll have to decide if the higher monthly costs associated with this type of loan are worth the long-term interest savings.
Is a 15- or 30-year loan better for you?
After reading about both mortgage options, you may be wondering, is a 15 or 30-year loan better? The answer to that question depends on your financial situation and lifestyle. If you can’t afford the higher monthly payments associated with 15-year loans, or you just value financial flexibility, then a 30-year loan may be better for you. But if you have a stable income and want to save on interest costs, a 15-year mortgage may be worth considering.
Get expert advice on your next mortgage
As you’re trying to decide which loan term is right for you, some questions may come up. The team at OVM is here to address all of your concerns and guide you through the mortgage process. Feel free to give us a call if you need assistance, or get started on your online application today.