Which Fixed Mortgage Should I Opt For? – 15 or 30 Years?
A tricky question stares you in the face when you want to decide the tenure of the mortgage loan you want to apply – a long-term option of 15 years or a longer term of 30 years? You need to weigh the pros and cons of both options in the backdrop of your plans about a place of stay and especially your current and projected financial situation.
It’s also a good idea to keep consult seasoned home loan experts like the ones at https://www.homeloancomparisonco.com.au/ for advice on loan tenure and other related aspects. But first, understand the basic differences between 15 and 30 years of a fixed mortgage loan which is a significant financial commitment.
15 Years Mortgage: Lower Interest Benefit
Shorter the tenure, lower the interest rate but larger the monthly payments. A 15-year loan is suitable if you want to a short-term financial liability and have the resources to honour your financial commitment.
30 Years Mortgage: Lower Payments Benefit
As the loan is spread over a longer period, your monthly payments are smaller. It is a good choice for younger homeowners as they can match the payments to their ability to make payments without stretching their finances.
15 Years Mortgage: Equity Builder
As the home is yours in a shorter time, you create a good asset. Then you are free to divert your resources towards savings, improving your home or other needs.
30 Years Mortgage: More Options
As your monthly outgoing on the mortgage loan will be lower, you can think of investment in savings, life insurance, stocks, paying debts etc. You will have better security in case of a sudden financial difficulty due to illness, loss of job etc. In a way, it provides you with some breathing space to create a financial cushion. This is something we at https://www.homeloancomparisonco.com.au/ always recommend to our clients.
It All Depends On Your Financial Profile
Budgeting your expenses like bills payment, debts if any, savings and other investment plans vis-à-visyour earnings from all sourcescan provide a good idea of your financial stability profile. If it is strong and steady, a 15-year mortgage can be a good option. This will free you of your commitment within a shorter timeframe. However, if your financial profile isn’t very strong, a 30-year loan may prove to be a wise choice. Your current credit score is an important parameter for the mortgage lender.
Use a mortgage calculator to determine your monthly affordability or simply contact the experts at https://www.homeloancomparisonco.com.au/for assistance on this count. You stand to benefit by consulting a professional financial advisor and mortgage loan officer to assess your financial health and suggest the right tenure of the mortgage.
If you want to know more, don’t hesitate to call our experts at 0419 856 669 or contact us via https://www.homeloancomparisonco.com.au/.