The 15-Year fixed rate mortgage shortens the term of the loan to 15 years. That means you own your home in half the time. And because the loan is shorter, you'll pay substantially less in total interest—less than half the total interest of a 30-year fixed rate mortgage. On the other hand, because you repay the loan in half the time, the monthly payments are higher than those of a 30-year fixed rate mortgage. For people who can afford the higher monthly payments, this is an excellent choice. It can allow you to own your home before your children start college or before you reach retirement.

Advantages

• Shorter term
• Often the total interest paid over the life of the loan is lower, less than half the total interest of a 30 year mortgage

Disadvantages

• Bigger monthly payment
• Qualification may be difficult because the income requirement is higher