30-Year Fixed-Rate Mortgage: Pros and Cons

Almost 90% of modern homeowners have a 30-year fixed-rate mortgage.[1] What is a 30-year fixed-rate mortgage, and what makes it so popular?

With this kind of loan, you get 30 years to repay your mortgage, and the interest rate stays the same for the entire 30-year term. As a result, your monthly payment toward principal and interest doesn’t change, allowing you to budget with greater accuracy.

Choosing a longer loan term also means your monthly payment will be lower compared to a mortgage with a shorter term, because you have more time to repay the loan amount. That’s why a 30-year mortgage is ideal if you want to keep your payments affordable.

At the same time, a 30-year loan term has its downsides. Let’s break down 30-year mortgage pros and cons:

30-Year Mortgage FAQ

Check out the answers to some frequently asked questions about 30-year mortgages.

Can you pay a mortgage off early? 

Yes, you can make extra payments to reduce your principal balance and finish paying off your mortgage ahead of schedule. This will help you save money on interest. However, keep in mind that some loans include a prepayment penalty for paying off your mortgage early.

Are mortgages only 15 or 30 years? 

No, it’s possible to get a loan term other than 15 or 30 years. A 10-year term, 20-year term, or custom term may be available, depending on the lender.

Does the 30-year mortgage cost more than the 15-year? 

Yes, a 30-year mortgage costs more than a 15-year mortgage. There’s more time for interest to accrue, and 30-year mortgages tend to come with higher interest rates.