30 Year Fixed Mortgages
The 30-year fixed-rate mortgage is easily the most popular loan option available today. This loan option offers home buyers the opportunity to lock in a low interest rate, and as a result, a low monthly payment that won’t change over the life of their loan. Stability makes budgeting easy!
A 30-year fixed-rate mortgage can also increase a homeowners’ cash flow because of their low monthly payment compared with a 15-year fixed-rate mortgages higher payment. While homeowners can choose to make additional payments in order to pay the loan off faster, they will still have the 30-year option to fall back on.
What Are the Benefits of a 30-Year Fixed-Rate Mortgage?
The 30-year fixed-rate mortgage is the perfect choice for homeowners planning on staying in their homes indefinitely. This loan option is a conventional loan, meaning that it’s backed by Fannie Mae or Freddie Mac. The FHA Loan and VA Loan have options for 30-year fixed-rate mortgages available for those that qualify. With a 30-year fixed-rate homeowners can enjoy benefits such as:
- Easy qualification.
- Lower monthly payments.
- Ability to buy more house.
- Can make prepayments if so desired*.
- Good for those looking to invest money elsewhere.
How Does a 30-Year Fixed-Rate Mortgage Compare to a 15-Year Fixed-Rate Mortgage?
A 30-year fixed-rate mortgage comes with lower, more affordable monthly payments. This may allow them to afford more house. Homeowners can, however, expect to pay significantly more for the same house than had they opted for a 15-year fixed-rate because the cost of a mortgage is calculated as an annual interest rate and they are borrowing money for twice as long. Use our mortgage calculator to compare both mortgage options.
*If prepayment penalties do not exist.