Calculate whether a fixed rate mortgage vs. an adjustable rate mortgage will benefit you in the short and long-term.

WHICH IS BETTER

15 or 30 year term?

fixed or adjustable rate?

Your loan terms, the number of years over which you will repay this loan, are a crucial factor in determining which options are best fitted for you. The most common terms are 15 years and 30 years.

The term will be shorter than the number of years to amortize the loan or pay it down to zero if this loan has a balloon payment. For example, a loan with a 5 year term amortized over 30 years will have the same monthly payment as a 30 year loan with the same interest rate.

However, note the difference. The 30 year loan will have equal payments for 30 years. The 5 year loan will have equal payments for 5 years and then a very large, or balloon, payment for the remaining balance, which may be refinanced.