Recently, long-time reader Sarah asked me about the difference between getting a 15- or a 30-year mortgage. I’ve written before about why I love our 15-year mortgage. We’ve gotten a 15-year mortgage on three properties: our house in New Hampshire, our house in North Carolina, and our apartment in Chile. A 15-year mortgage has helped us build equity, save more each year, and pay less in interest.
But what if you live in a high cost-of-living area, and the payment on a 15-year mortgage isn’t feasible? What if you plan to stay there for awhile, and renting doesn’t make a lot of sense? Or what if, for a variety of reasons, you want to buy a house, but you can’t make a 15-year mortgage payment work?
On a back-of-the-napkin calculation, it’s clear to see why many people choose a 15-year mortgage is superior. You pay a lot less in interest. But, you also have a much higher monthly payment (for 15 years). Continue reading “When You’re Considering a 30-Year Mortgage”