30-year fixed

The 30-year fixed rate mortgage remains the standard mortgage with several benefits for buyers who expect to stay in their homes a long time. Because the borrower pays more interest than principal for the first 23 years, the tax deduction is substantial. And as inflation increases, your unchanging mortgage payment accounts for a relatively smaller portion of your income as the years go by.

15-year fixed

A 15-year mortgage means higher monthly payments than an equivalent 30-year loan, but not that much higher. At the same rate of interest, payments on a 15-year mortgage are roughly 20-25% higher than a 30-year loan. And one of the benefits of choosing a 15-year loan is that you can generally get a lower interest rate for an otherwise similar loan. Another advantage is faster equity build-up, which makes the 15-year loan an ideal alternative to owning your home free and clear as quickly as possible.