15 Year Loans

Is this loan right for you?

A 15 year loan is a tool to pay off your property faster. It involves a much higher monthly payment. It is also usually a loan where the interest rate is fixed for all 15 years of the loan.

Some customers treat this higher payment as a form of “forced saving”. This gives them the forced discipline to build their equity each month in their property.

Some people will purchase a property with a 15 year loan, with the best of intentions, but then later on switch to a longer term loan to reduce their payments.

A $350,000 loan at 6%:

• on a 15 year loan is $2,953

• while the 30 year term will have a payment of $2,098

• the 15 year loan payment is nearly 40% higher.

This is an ambitious loan to have. Over the lifetime of the loan the interest paid is substantially lower.

One method to use the 15 year loan on is to buy a smaller, more affordable property. By reducing your loan size you may be able to adjust to the higher 15 year payment level.