Chris Oxley, 
Credit Union

Are you considering a 15-year mortgage loan? There are a number of benefits, including a lower interest rate, the ability to pay off your home much faster, and the ability to build your equity quicker. Here, we take a look at each of the pros.

Lower interest rate

If your vision board for the future has “15-year mortgage” pinned right to the top, you probably already know about the potential savings in interest. It can be substantial. The average interest rate on a 15-year mortgage is typically lower than that of a 30-year mortgage, making it an obvious pro and a key reason why homebuyers pick a 15-year. Depending on the price of the home, you could easily save a lot of money in the long run.   

Ability to pay off your mortgage faster

Another benefit of a 15-year mortgage loan is that it forces you to save. Because the home acts as an investment to your pocketbook, paying more each month will compel you to spend less and instead put more toward your home. 

Build equity quicker

Shorter-term loans are also great for building equity. Because your monthly mortgage payment will be higher and you are paying less interest, your equity will build quicker. 

The bottom line

A 15-year mortgage can save you a lot of money. Here’s an example with a mortgage amount of $500,000 with a 20% down payment and loans available at 4.25% for 15 years or 5% for 30 years. 

As you can see, a 15-year loan with a faster fixed repayment schedule and lower interest rate results in big savings compared to a much higher total cost for the 30-year rate. However, a 15-year loan also has higher monthly payments.

For more about the downsides to a 15-year term, visit  

By Chris Oxley, Elevations Credit Union. Chris is a Mortgage Loan Originator at Elevations Credit Union in Longmont. If you have questions regarding mortgages, please call 720.552.1018 or e-mail  NMLS# 1057338