A fixed-rate mortgage is the standard against which most other mortgage products are measured. Here are the differences between a 30-year and a 15-year fixed-rate.
30-Year Fixed-Rate
- Provides the borrower with a fixed rate for the entire 30-year term of the loan
- The borrower will pay the loan in full if he or she makes the required principal and interest payment for 30 years
- Primary benefit: the payment is the smallest since the term is the longest
15-Year Fixed-Rate
- You can shorten your mortgage by 15 years and usually get a lower interest rate
- Advantage: you’ll build more equity in your home sooner than you would with a 30-year loan
- Higher monthly payments
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