15-Year Mortgages Grow in Popularity
In this weekend’s Real Estate section, the Times had an article on the increasing popularity of 15-year, fixed-rate mortgages: “Brokers and mortgage industry executives say that these loans are becoming especially popular among people who want to shed debt more quickly, and in light of the current economic atmosphere, that goal is perhaps more widely…
In this weekend’s Real Estate section, the Times had an article on the increasing popularity of 15-year, fixed-rate mortgages: “Brokers and mortgage industry executives say that these loans are becoming especially popular among people who want to shed debt more quickly, and in light of the current economic atmosphere, that goal is perhaps more widely applicable than ever. Of course, debt shedding comes at a price. Those borrowing $400,000 on a 15-year loan, with a 4.375 percent interest rate, the average rate earlier this month, can expect to pay about $3,034 a month, compared with about $2,056 a month for a 30-year fixed-rate loan with a 4.625 percent average rate. (The payment excludes costs like property taxes and insurance.) Because a 15-year loan also has 180 fewer interest payments than a 30-year loan, the borrower with that 15-year loan would pay $194,000 less in interest over the life of the mortgage.” Any readers considering them over 30-year loans?
Photo by Rev Dan Catt
I always go for 30 years, simply cause i can always pay off earlier :p.
“Brokers and mortgage industry executives say that these loans are becoming especially popular among people who want to shed debt more quickly, and in light of the current economic atmosphere, that goal is perhaps more widely applicable than ever. ”
RRRRRRRRRIIIIIIIIIIIIIIIGGGGGGGGGGGGGHHHHHHHHHHHHHTTTTTTT!!!!!!!!!!!!!!!!!
You are a bunch of stupid assholes! We are on the verge of economic collapse and everyone is applauding this piece of nonsense!
Keep you eyes right here..
http://www.bloomberg.com/markets/rates/index.html
The jig is up in the Bond Market and everyone is siding to the door. 15, 30 or 20 mortgages wont make a difference, it’s over, done and kaput!
The What
Someday this war is gonna end…
Anyone have access to the different average life computations for 15 versus 30 year mortages? I bet they’re not that different.
I.e. people pay of 30 year mortgages in around 20 years on average anyway, so I don’t think the 15 years are that much different. Having the interest tax deductible is pretty nice too. If I can lock in a 5% or lower rate, I’m not pre-paying a single dime of my mortgage, just saving the money instead.
Couldn’t agree with MoneyForNothing more. I am debt averse but now is the time to lock in the lowest rates for the longest period of time. I signed a 4.5% mortgage a few months ago. I’d love to pay this off early but why would I? In the future inflation and interest rates will be higher that 4.5% and I will be sitting on a loan from the bank that is less than inflation.
45% deductible – highly doubt that applies to most here looking to buy a house cause they most likely in AMT status on tax returns.
People are debt shy…and they should be. Spending beyond your means is different than taking on responsible debt.
IMHO, the time/value cost of money today greatly weights in favor of a longer duration.
If you’ve always been financially responsible, and you buy within your means, then you should not look forward to giving the bank your money sooner.
OK, there’s the amt of interest saved (but 45% of this is deductible ultimately, so cut that number in half (more on this later)). But your payments are much higher now (while dollars you use to pay them with are worth more).
However, we are likely headed into a long period of extremely high inflation, and a long-term weakening of the dollar. We’ve had no real inflation for 20 years.
So buy within your means, and allow the bank to loan you money in today’s value that will be worth substantially less when you repay it in years 15-30 (and our taxes will be raised in the future, so you will get a larger deduction as well…)
“Rob are you trying to be provocative or are you just a moron?”
I believe Rob is realizing he may have made some bad choices, and now he would like to see the rules change. But that’s not going to happen.
“debt shedding comes at a price”
You’ve lost me, Gab.
***Bid half off peak comps***
Rob are you trying to be provocative or are you just a moron?