The 30-year fixed mortgage is a standard product that is used by the vast majority of home buyers in the United States. According to the Mortgage Bankers Association, just over 85% of all loans processed annually will be for the 30 year fixed mortgage.
However, there are some considerations that all home buyers should make before assuming that this is the ideal solution for their borrowing needs. By using a mortgage calculator for a 30-year fixed loan and comparing it to a 15-year fixed loan, it can be a real eye-opener as to the potential for savings.
How to Compare
When using a mortgage calculator for a 30-year fixed loan and comparing it to a 15-year fixed loan, use the same online website for both calculations. Ideally, look for a calculator that allows you to do a true side by side comparison on the same calculator.
Buyers should be able to input the interest rates, loan amount, term, the origination fees, specific interest rates, closing costs and property tax and insurance. It can also be very helpful if you have the option to input the time to loan payoff or sale of the home in the comparison.
What to Consider
The immediate benefits on the mortgage calculator for a 30-year fixed loan will be evident as the cost of the monthly payments will be significantly lower with the 30-year fixed than for a 15-year fixed. However, the cost of the shorter-term loan will be lower, often by thousands of dollars, which only becomes more pronounced the longer the time period until sale or pay off.
By trying different numbers in the calculator and considering your financial requirements and income, home buyers can determine the ideal balance between loan amount, term, and payments that are customized to their specific budget.
Take advantage of our easy to use mortgage calculator for a 30-year fixed loan at Guaranteed Rate.
