Choosing a 30 or 15 Year Fixed Mortgage Rate
The monthly repayments for 30 year or 15 year fixed mortgage rate are just one important consideration for many people who are looking to buy a home. Paying the mortgage off early is important for many people that buy a home later in life. Decisions of this nature need careful consideration before any commitment is made. It is important to make sure that the interest rate doesn’t change over the course of the loan.
It is not uncommon to see lenders offering deals that are too good to be true. A 15 year fixed rate mortgage means the interest rate remains stable for the life of the loan. This is of great benefit for anyone that does not like surprises. When my wife and I were looking at homes for sale we decided to check out the various loans available with 15 year fixed mortgage rates.
Having a realistic, sustainable monthly payment on our mortgage was important even though we wanted to pay off our debt as soon as possible. So in consideration of this point we also looked at longer, 30 year fixed rate mortgages as well. Still, having a mortgage close to retirement wasn’t what we were looking for, so we decided to try for a loan with a 15 year fixed mortgage. We were worried about the emphasis placed on early completion of the mortgage.
We thought about it long and hard and despite the pressure we decided to go with the 30 year loan plan. Many factors were taken into account when reaching this decision. The most important point was the fact I discovered my wife was having a baby. As she intended to raise our child at home we couldn’t rely on her financial income to the monthly expenditure. The problem we could see was the increased financial commitment on a monthly basis if we had opted for the 15 year fixed mortgage rate. All things considered, we just didn’t want to bite off more than we could chew. The 30 year loan repayments were considerably lower than the 15 year figures.
Being able to make additional lump sum payments during the year means the outstanding loan reduces faster. It is possible to take years off your loan if you can make a few extra payments during each year. This is well worth it in the long term but it does require some discipline. Our desire for a 15 year fixed rate mortgage was second place to our more immediate needs. Things worked out well anyway, even though we were unsure about it to start with.
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