Allard LTD. CPA & Financial Services

(952) 895-0895

Lifestyle Read Time: 4 min

Lots of Variables with Fixed-Rate Mortgages

When selecting a fixed-rate mortgage, a prospective borrower has to determine how many years to finance the loan. Some financial institutions offer 10-year and 20-year, fixed-rate mortgages as well as 15-year and 30-year, fixed-rate home loans.

For the purpose of comparison, this worksheet takes a look at 15-year and 30-year, fixed-rate loans.

The payments on a 30-year mortgage are generally lower than 15-year loans, but their interest rates tend to be higher. The lower payment comes from spreading out the loan over twice as many payments. Because of the longer timeframe, a 30-year mortgage owner pays more in interest payments than a 15-year mortgage holder.

15 Years vs. 30 Years

A 15-year mortgage is paid off twice as quickly as a 30-year mortgage, which may allow the home buyer to build equity at an accelerated rate. The payments on a 15-year loan are higher – but they aren’t usually twice as high – as a 30-year loan.

To get a better idea of the differences, take a few minutes and add some numbers to the accompanying worksheet.

Worksheet

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Share |
 

Related Content

An Arm and a Leg

An Arm and a Leg

A visit to the hospital can be painful, for both your body and your wallet. Don’t let it be more painful than it has to be.

Stop Wasting Money

Stop Wasting Money

One way to find money is to examine your current spending habits and eliminate money wasters.

Managing Your Lifestyle

Managing Your Lifestyle

Using smart management to get more of what you want and free up assets to invest.

 

Have A Question About This Topic?







Thank you! Oops!

Do Your Kids Know The Value of a Silver Spoon?

You taught them how to read and how to ride a bike, but have you taught your children how to manage money?

Keeping Good Records is Good Business

Maintaining good records for your business not only helps to meet your tax and legal obligations, but it can save you money.

Saving on Subscription Service Costs

There are ways to improve your physical fitness without denting your fiscal fitness.

View all articles

Should I Pay Off Debt or Invest?

This calculator will help determine whether you should invest funds or pay down debt.

Interested in a Fuel Efficient Car?

Estimate how many months it may take to recover the out-of-pocket costs when buying a more efficient vehicle.

Can I Refinance My Mortgage?

This calculator can help determine whether it makes sense to refinance your mortgage.

View all calculators

Managing Your Lifestyle

Using smart management to get more of what you want and free up assets to invest.

View all presentations

A New Way to Look at Your Bucket List

Bucket lists don’t have to be for tomorrow.

Forecast

The market is as unpredictable as the weather. We’d love to help you prepare.

An Arm and a Leg

A visit to the hospital can be painful, for both your body and your wallet. Don’t let it be more painful than it has to be.

View all videos