15-Year Mortgage or 30-Year Mortgage: Which to Choose?

When getting a mortgage loan for your dream home, you can choose between two terms: a 15-year fixed-rate mortgage and a 30-year fixed-rate mortgage. Keep in mind that these two options also come with their advantages and disadvantages. If you want to explore the difference between them before you decide, this article will help you find the right one for you.

How Do the Two Differ?

The difference between the two is straightforward. If you choose the 15-year fixed mortgage, you need to pay off your loan within 15 years. That means you would finish paying your dues faster than the other option. Since you are paying your mortgage faster, you could also enjoy the benefit of having a lower interest rate compared to the usual interest rate for a 30-year mortgage. 

Yet, that does not mean that the 15-year mortgage is the best option for all. This is because aiming for full payment in a shorter period and enjoying a lower interest rate means that your monthly payment would be more extensive compared to the 30-year mortgage plan. To some, this option makes the loan less affordable. Unless you can guarantee that you can pay your monthly mortgage dues, this option may not be the best for you.

Suppose you plan to take out a loan for a $350,000 property with a 2.35 percent interest rate. Given the 15-year term, you would need to pay a monthly mortgage of $1,990. If that seems too heavy for you, you can always explore the 30-year fixed mortgage.

Choosing the 30-year fixed mortgage means you can spread out the payment to make it more manageable. But since this option would allow you to take your time in paying your dues, it would ask for a bit higher interest rate. The rate difference is not that much, but it would still impact how much your total payment would be. If a 15-year mortgage requires an estimated 2.35 percent interest rate, the 30-year mortgage would ask for around 2.79 percent interest rate. 

That means if you take the 15-year fixed mortgage, you would have to pay $8,225 just for the interest rate. On the other hand, the 30-year mortgage would amount to a $9,765 interest rate. You can save around $1,500 if you decide to finish the mortgage in 15 years. 

Given the 30-year fixed mortgage, your monthly payment would be around $999. That is one thousand dollars less than the 15-year term demand. For that reason, the 30-year mortgage plan is what the homebuyers in the US usually take. 

Important Note: Keep in mind that the interest rates given here are just estimates. They would still vary depending on your lenders and the state of the economy. 


Whether you would get the 15-year or the 30-year mortgage depends on your ability to pay your monthly bill on time. If you think that the $1,990 monthly fee for the 15-year mortgage contract would be too much to handle, you should not consider it. At the same time, if paying for that monthly fee means that you would not have extra money for your other expenses, you are better with the 30-year mortgage. Meanwhile, if you want to finish with the payment fast and can afford to pay your dues on time, the 15-year mortgage with lesser interest would be a wiser decision. Just keep in mind that a monthly mortgage is not the only expense needed for a home!

Once you are decided and are ready to apply for a home loan in Bellevue, call us at (206) 719-2694. Our advisors at paloRATE will help you find home loans with the most competitive interest rates and closing costs. You can also view live mortgage rates from our website. Check it now!