A 30 year mortgage is not designed to build equity fast. It is designed to make a home affordable. Today a 15 year rate is available for 5.25% with an APR of 5.39%. Now that builds equity! If your mortgage balance is smaller why be on a 30 year term? A 15 year payment on $100,000 is about $803 a month. You will pay about $144,000 over the life of the loan. A 30 year payment on $100,000 at 5.75% would be about $583 a month, or $209,880 over the life of the loan. Pay $803 monthly or $144,000. Or pay $583 monthly and $210,000. The choice is yours.
If you can afford $803 a month instead of $583 you can save $66,000 in interest. Wouldn't that make sense?
Always consult your tax advisor. Not all will qualify on a 15 year mortgage.
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