The lower mortgage length the better and the payments are not very much more if you can afford it. Check out the scenario below, you can save a ton of money!
You can afford the higher monthly payment
You have a stable job
You're nearing retirement
There are other things you want to save for
Let's say you're looking to take out a $200,000 fixed-rate mortgage, and you're approved for 4% interest for both a 15-year and 30-year mortgage. (In reality, the 15-year mortgage would most likely come with a lower rate, but for the sake of an easy comparison, we'll keep the rate the same for both options.) If you go with the 30-year mortgage, you'll wind up paying $955 a month and a total of $143,700 in interest over the life of the loan. If you take the 15-year mortgage, your monthly payment will be higher at $1,479, but over the life of your loan, you'll only wind up paying about $66,300 in interest.
In all, you'd save over $77,000 by going with the 15-year mortgage.
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