If you borrow $200,000 with a 30-year mortgage at current rates, your monthly payment would be about $846. Over the life of the loan, you’ll pay almost $105,000 in interest. Opt for a 15-year loan instead and your payments will be roughly $500 more, or about $1,348 per month.
Also question is, how can I pay off my 30-year mortgage in 15 years?
Options to pay off your mortgage faster include:
- Adding a set amount each month to the payment.
- Making one extra monthly payment each year.
- Changing the loan from 30 years to 15 years.
- Making the loan a bi-weekly loan, meaning payments are made every two weeks instead of monthly.
Beside above, is it harder to qualify for a 15 year mortgage?
Is It Harder to Qualify for a 15-Year Mortgage Loan? If you have a higher income that proves you can afford the higher payments associated with a short term mortgage loan, then it’s easy to qualify. You may also find interest rates that are between . 5 and 1% lower than they are for a 30-year mortgage.
What are some negatives in choosing a 30-year mortgage over a 15 year mortgage?
Disadvantages of a 30-Year Mortgage
- Higher interest rate.
- Loan balance remains higher for longer.
- Spend more in interest over the life of the loan.
- Home equity is slow to build.
- Making monthly payments over a long period of time.
15–year mortgage pros and cons
|15-Year Mortgage Pros||15-Year Mortgage Cons|
|Lower interest rates than 30-year fixed-rate mortgages||Higher monthly payments|
|Lower total cost of interest over the life of the loan||Less cash left over for investing, emergency funds, and other expenses|
A 15-year mortgage can save a home buyer significant money over the length of the loan because the interest paid is less than a 30-year mortgage. … Because payments are significantly higher on a 15-year loan, buyers risk defaulting on the loan if they cannot keep up with the payments.