48 Meriden Rd, Suite 1, Middlefield, CT 06455

2 Reasons to consider shorting your mortgage term

15 vs. 30: 

Two reasons some people take on a 15-year mortgage 

The primary difference between a 30 year mortgage and a 15 year mortgage is simply the length of the loan. One amortizes over 30 years, the other over 15.  (Wikipedia says that an “amortizing loan is one where the principal is paid down over the life of the loan”.)  Since the monthly payments are spread out over a longer time,  a 30-year mortgage is going to have a lower interest rate, so, why do some people choose 15-year mortgages? These are two of the primary reasons homebuyers purchase a home with a 15-year fixed mortgage. 

  1. EQUITY BUILDING: Maybe you make enough money to have a slightly higher-than-average mortgage payment, which in turn provides you with more equity. Equity in your home provides a sense of comfort, since you can pull a home equity loan for life’s unexpected costs/emergency funds. Equity is the money that the borrower pays into the home; the value that you build. Maybe you want to add a deck on the back of your house, or built that cozy home theater in your man cave. Having the equity to draw from will be greater in a 15-year loan because you’ve grown that equity faster. That kind of work on a home can help you build for resale faster which is great for the borrower who does not expect to stay in that home for long.. 


  1. SAVE MONEY ON INTEREST: Whenever you take a mortgage on, you are paying back the lender in the form of interest. Since, in a 15 year loan, you are borrowing money for half the time, the total interest costs are much lower. For example, take a $200K mortgage at 4% interest. With a 15 year mortgage, the interest will total to just over $66K. That sounds like a lot of money, but wIth a 30 year mortgage, that same exact loan yields almost $144K in interest. You are paying the lender for the ability to pay at the rate that is feasible for you at that time. T


In the end, finding which mortgage suits your needs is about having a loan officer with access to a variety of quality loan products that will help individualize your lending experience and tailor your mortgage to your financial situation.


Yvonne Trode

Office: 844.788.7237 x8763

Cell: 315.800.3202

Email: ytrode@northeast-mortgage.com