15-year-rate-mortgage-300x200Although Mortgages have been at all time lows for some time, didn’t you cringe when you read the amortization page and realize how much interest you were paying over 30 years?  Unless you plan to move in a few short years, it may be worthwhile for you to consider a 15 year mortgage. Let’s take a look.

If paying off your house is a priority, you have to consider this option. The biggest benefit is paying off your mortgage in half the time. Even if you are unsure if you are going to move or not in a few years, the money saved on interest can get up into the 100,000 or more mark. Why don’t more people exercise this option?  It’s not too late….read on!

The 30 year fixed mortgage is the American staple, the 90% of the time go to for home buyers in many decades since it was created. According to the Mortgage Bankers Association, 86% of people applying for purchase mortgages in Feb. of 2015 opted for 30 year loans. But many of those buyers might have been better served opting for a 15 year mortgage. Take a look:

Say you want to obtain a 300,000 loan amount today available at 4% for 30 years……or at 3.25% for 15 years. The combined effect of a much faster amortization, and the lower interest rate means that borrowing the money for 15 years would cost 79,441, compared to 215,609 over 30 years, or  just about 2/3 less! 

A HUGE SAVINGS, but the higher monthly payment can be a sticking point for many borrows, especially at the initial purchase…..but, if you have been in your home a few years, perhaps it’s worth looking into a 15 year refi. Above example dictates a $1432 payment on 30 years, and a $2108 payment on 15. While not for everyone, it’s a great option to consider, now, or after the dust settles and you plan to grow roots in your current home.

However, you can always find ways to pay your house off sooner! Apply additional principal payments can eat away your balance without being locked into higher monthly amounts. Even one EXTRA mortgage payment per year can make a huge difference. Just by making one extra payment each year you can reduce your loan to approx 22 years to pay off!

Great you say,  but I don’t have the extra payment……consider breaking it up to 1/12s and add that amount to current payment each month.  Or call The Tim and Kym Team for some other great tips on your mortgage. We have resources on hand to help you with the best options to help you SAVE! 





  1. Kristin J. says:

    Wow, thanks for sharing this article. Such a simple idea to make an extra payment per year to shave 8 years off your mortgage. Thanks, we’ll be putting this to practice!

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