30-Year Fixed-Rate Mortgage: Pros and Cons

Homebuyer researching in her apartment about the pros and cons of a 30-year fixed-rate mortgage.

Almost 90% of modern homeowners have a 30-year fixed-rate mortgage, according to Freddie Mac in 2019. 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:

Pros and Cons of a 30-Year Mortgage

Benefits of a 30-year mortgageDrawbacks of a 30-year mortgage
Smaller monthly mortgage paymentHigher interest rates
Greater flexibility to put money toward other financial goalsMore total interest paid
Can afford to borrow more compared with a 15-year mortgageTakes longer to build equity and fully own your home
Bigger mortgage interest deduction if itemizing at tax timeCould end up paying more if you’re planning to move soon

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 30-year 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.

Light bulb

Ready for more learning?

Here’s some other helpful articles

Advertising Disclosure

Any opinions, analyses, reviews or recommendations expressed in editorial content are of the author alone, and have not been reviewed, approved, or otherwise endorsed by the advertiser. We make every effort to provide up-to-date information, however we do not guarantee the accuracy of the information presented. Consumers should verify terms and conditions with the institution providing the products. Articles may contain some sponsored content, content about affiliated entities, or content about clients in the network.

Editorial Note

itsHome, a LMB Mortgage Services, Inc. company, is compensated by third-party advertisers, however, any opinions, analyses, reviews or recommendations expressed in editorial content are of the author alone and have not been reviewed, approved, or otherwise endorsed by the advertiser. While reasonable efforts are made to maintain accurate information, the information is presented without warranty.