The Pros and Cons of a 15 years mortgage.
Pro: Lower Interest Rate: 15-year mortgages typically have a lower interest rate than 30-year mortgages, which means that the borrower can save a significant amount of money over the life of the loan.
Pro: Faster Equity Build-Up: Because the loan term is shorter, borrowers will build equity in their home faster. This means that they will own a larger portion of their home sooner, which can be beneficial for those who plan to sell or refinance in the future.
Con: Higher Monthly Payments: Because the loan term is shorter, the monthly payments will be higher. This can be a challenge for some borrowers who may not have the budget to accommodate the higher payments.
Con: Limited Flexibility: A 15-year mortgage does not offer the same level of flexibility as a 30-year mortgage. For example, if a borrower experiences financial difficulties, they may not be able to refinance to a longer term loan in order to lower their payments.
Pro: Potential for Lower Total Interest Paid: Despite the higher monthly payments, over the life of the loan, the borrower will pay less in interest with a 15-year mortgage than a 30-year mortgage.
Pro: Potential to Retire Mortgage Early: If a borrower has the financial means to make extra payments, they may be able to pay off their mortgage early, which can save them thousands of dollars in interest.
Overall, a 15-year mortgage can be a great option for those who can afford the higher monthly payments and who want to build equity in their home faster. However, it may not be the best option for those who are on a tight budget or who want the flexibility of a longer loan term.
