Read this tip to make your life smarter, better, faster and wiser. LifeTips is the place to go when you need to know about Mortgage Rates and other Mortgages topics.
You will receive a lower interest rate if you select a 15-year loan. Your savings should be between one-quarter and one-half percent. It's possible to get an even lower rate if some lenders are trying to generate more 15-year loans.
The potential savings goes beyond the discounted interest rate, however. If you can afford the 15-year payment – which is not close to double the 30-year payment, only about 40-50 percent higher – you will save thousands, possibly hundreds of thousands of dollars in interest over the life of the loan. The quicker amortization (pay back) makes a huge difference in the interest cost, regardless of the rate of your loan.
Therefore, even if your goal is not to pay off your mortgage loan, a 15-year term is very advantageous to you. If your cash flow permits, you will have a lower interest rate and save a large amount of money if you choose a 15-year mortgage loan.