Is a 15-year mortgage right for you?

Anyone who is buying a home wants to own it outright or get out of debt as soon possible, and not be beholden to the bank and the whims of Wall Street.  For some people choosing a 15-year loan term over a 30-year loan term is the way to do this, especially if they can afford the higher payment.

With homes as affordable as they are in Salt Lake City and throughout Utah right now, looking at a 15-year mortgage instead of a 30-year term may be a better bet for you.

The median price of a home in Salt Lake County is currently running about $230,000.  On the average a 15-year term is usually 0.50% to 0.625% lower interest rate than a 30-year term, so although the payment will be more, it isn’t by any means doubled.  For instance, the 15-year payment on a $230,000 loan would be around $500 more a month than a 30-year term, however interest paid on the loan over the 15 years will be about $127,000 less and from day one you’ll be paying more principal than interest from each payment, whereas on a 30-year term you won’t start paying more towards principal than interest until your 191st payment, or 15.9 years into the loan. In fact, you don’t reach the half-way mark in paying off your home until your 24oth payment, or 20 years into the loan. With a 15-year term you will reach the half-way mark in just 8 years 8 months.

As well as saving quite a bit of money over the term of the loan with a 15-year mortgage, you also have quite a bit of equity in your house should you decide to sell it and buy another home, which equates to a big down payment on a bigger or nicer home.

You could also opt to take-out a 30-year mortgage loan and simply add the $500 more a month effectively shortening the loan term to 16 years, while still having that $500 available for emergencies should they come-up.

Whichever way you decided to go, it always makes sense to pay as much per month on all your debt, mortgage, credit card or auto loans.  In the long run you’ll save thousands in interest and have more equity in your home and automobiles when you go to sell them.

For information regarding how a 15-year term could benefit y0u, visit my calculators page on my website at


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