Of course, you don't need to fall into either category to appreciate the savings this mortgage provides homebuyers. Check out the advantages below and what you need to know when considering your options.
A 15-year mortgage minimizes your total borrowing costs. You're getting a lower interest rate, and a larger chunk of your monthly payment goes toward paying down the loan principal instead of interest owed. So, you're building equity faster and spending less on overall interest.
Let's take for example a $350,000 home. If market rates were 4% for a 30-year mortgage (4.41% APR) and 3.25% for a 15-year mortgage (3.95% APR), you can expect to pay under $100,000 in interest through the life of the 15-year loan. That's a savings of over $150,000!*
*Rates are for illustrative purposes only. This is a hypothetical example using numbers based on a 750 FICO, 80% LTV.