15 Year Mortgage Rates: Are They Worth Considering?

2007-03-08 10:33:40

( Financial )



If you are one of the people who want to see their mortgage paid off before your kids go to college or before you reach retirement, you may want to opt for a 15 year mortgage versus the 30-year mortgage. You may think that you will not be able to pay the higher monthly amortization for a 15-year mortgage, but think again. The savings you incur may just be worth it.

It is true, monthly payments for a 15-year mortgage are higher than the 30-year mortgage. However, 15 year mortgage rates are significantly lower than the common 30-year ones. This 15 year low mortgage rates will make up for the increase that you are going to see in your monthly payments.

Perhaps the most important point is in 15 year mortgage rates, you will really end up paying less in the long run even if your monthly payments are a little bit higher than what you had originally had foreseen. If you compare the total amount you are going pay for a 30-year mortgage and the amount you will pay using 15 year mortgage rates, you will see that you will save more to opt for a 15-year mortgage than if you put the difference in a savings account.

So the sacrifice of paying a bit more each month will eventually pay off as you will build equity and ownership on you home in half the usual time, you save a lot more due to lower interest rates and 15 year mortgage rates stay more or less the same throughout the entirety of your loan.

You may not really think that you can afford the monthly payments for a 15-year mortgage compared to the 30-year mortgage, but in terms of savings and lower interest rates, it is still worth considering. So do your research, run and calculate some numbers. Maybe you can work something out.


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