30 Year Fixed Mortgage Interest Rate: Comparing 30 Year Fixed Mortgage Interest Rate to 15 Year Ones
When you own a house and you have it on mortgage it can sometimes get confusing with regards to how long of a period of mortgage you should sign up for. To begin with, having a longer period of mortgage would give you a higher interest rate although you’d pay lesser every month, whereas a mortgage with a shorter term has a lower interest but higher monthly payments.
For example assuming that you mortgaged the same amount for both terms, if you took on a 30 year mortgage term, you would pay a higher 30 year fixed mortgage interest rate although your monthly payments would obviously be smaller but when you take on a 15 year term, then the interest would be smaller but you’d have to pay a higher monthly principal.
As a result, if you are contented with your 30 year fixed mortgage interest rate, you can settle for a 30 year mortgage term and you won’t need to refinance your mortgage into a 15 year term. However, you could always change it and pay a bigger monthly principal if you want to finish your mortgage earlier.
By asking your lender about a mortgage period change, you will know if you could do that without needing to incur extra costs and you could also understand what you need to do to achieve that. At times, there is a prepayment penalty clause in your loan and you have to determine whether yours have it or not. Having this prepayment penalty clause will not allow you to easily change your financing term without accumulating additional penalty costs.
If you are able to change your mortgage term, to get an idea as to how much you would need to pay every month, you can always use an online mortgage calculator like the one in bankrate.com. This calculator takes several inputs from you and gives you your monthly principal.
The first is the number of years that you still have on your mortgage. The second is the current amount you owe from your mortgage statement. Finally, the calculator will need your 15 year interest rate instead of the old 30 year fixed mortgage interest rate. After that, you will easily and accurately receive the amount you would need to pay as monthly principals.