Which loan term is the best financially?

A mortgage term is the length of time you’ll need to pay back the loan. Typically, lenders offer terms of 30, 20 or 15 years, but other terms may also be available. The difference in a 15- versus 30-year mortgage simply comes down to the number of payments you’ll make and the amount of interest you’ll need to pay over time. With a 15-year mortgage, your monthly payment will be higher because you’re paying back the loan in less time than you would with a 30-year mortgage. But that means you’ll also pay less in interest over the life of the loan. Fifteen-year mortgages also tend to have lower interest rates than 30-year mortgages. Here’s an example of the monthly payment differences between 15- and 30-year mortgage rates.