Texas Lone Star Lending Video
Why Not Get a 30-Year Mortgage and Pay Extra?
Why choose a 15-year mortgage when you could take a 30-year loan and simply make extra payments? That strategy can provide valuable payment flexibility—but the lower interest rate available on a 15-year mortgage changes the math. We explain the tradeoff and the two questions that matter most when deciding between them.
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Read the transcript
The 15-year versus 30-year decision brings up a really good question: Why not just get a 30-year mortgage and make extra payments?
And honestly, that can be a very good strategy.
You qualify using the lower 30-year payment, and if money gets tight someday, you're only obligated to make that lower payment.
If 15- and 30-year rates were the same, paying extra each month to match the 15-year payment would give you the same result.
But the rates aren't the same. A 15-year rate is typically about half to one percentage point lower than a 30-year rate. Because of that difference, making those extra payments on the 30-year loan will pay the mortgage off roughly 13 years early instead of 15.
So the bigger questions are: Can you qualify for the 15-year payment? And do you want to be obligated to make it every month, or would you rather pay a little more for flexibility?
And remember - it's always okay to ask. We're here to help you get home.