30-Year vs. 15-Year Mortgage

General
1

I’m planning to buy a condo and want to pay it off in 15 years. Interestingly, the rates I’ve been quoted are slightly better for a 30-year mortgage. The monthly payment difference between the 30-year fixed rate and the 15-year fixed rate is $600.

However, I understand that mortgage interest can be tricky. I’d like to know how much more it would cost in the long run if I opt for the 30-year mortgage and consistently pay an extra $600 each month. I’m confident in my financial discipline and will make the additional payments, but I also like the flexibility of being able to “borrow” that $600 if I ever need it.

2

Take out the 30 year and pay the same as you would to the 15 yr to your principal.

Look up mortgage amortization table.

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3

That’s what I did. Compare total interest paid using an amortization table; 15-year costs less.

4

OP says 30-year has better rate. If no penalties, only a fool would choose a 15-year here.

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5

Take the 30-year and pay more. It offers flexibility if life events impact your finances.

6

Interest costs are similar with a 15- or 30-year if you pay extra. Check for prepayment options.

7

You don’t have to take 30 years. If rates are better, compare overall costs and keep flexibility.