2/22/2013

How Much Can Be Saved With a 15-Year Mortgage Payment?

15 year loan chart
15 year loan vs. 30 year loan payments
A 15-year loan mortgage payment is not what all buyers can afford, but lower rates are making them very attractive for those consumers who have the ability to make the higher payments.

The 15-year mortgage accounted for nearly a third of all refinanced loans in the first 7 months of 2012, compared to 2007 when they made up just 8.5%.   And the California Association of Realtors reports that "statistics from the Mortgage Bankers Association show that a 15-year loan accounted for 23 percent of refinancing applications in November of last year."

Not only are the long term interest savings for a new purchase evident in the chart to the right, some owners could also actually reduce their current 30-year payment depending on when they took out their existing mortgage:
". . . a couple who signed up for a 30-year $300,000 mortgage in January 2004 with a 5.75% fixed rate would have a roughly $1,751 monthly payment. By refinancing the remaining balance of about $255,828 into a 15-year fixed rate loan at 2.81%, the new monthly payment would be slightly lower at almost $1,744."



Another advantage is that equity is built into the home faster with a short term loan.  Don't miss the opportunity to take advantage of today's lower interest rates if you possibly can!



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