If you're about to buy a home or refinance, you're likely asking:
“Should I go with a 15-year or a 30-year mortgage?”

You're not alone. Many borrowers freeze at this decision. After all, your loan term influences how much you pay monthly, how much interest you'll shell out, and even your financial flexibility down the road.

Good news: This guide breaks it all down. No jargon. No fluff. Just clear, actionable advice so you can pick the loan term that fits your life, not someone else’s.

Key Takeaways:

• Shorter loan terms mean higher monthly payments but less interest paid over time.
• Longer loan terms offer lower payments but more interest in the long run.
• Consider income stability, life goals, and future flexibility.
• Know the impact of term choice on total loan cost and approval odds.
• Work with a licensed mortgage advisor to find the best fit.

What is a Loan Term and Why Does It Matter?

A loan term refers to the number of years you agree to repay your mortgage. Common terms include:

• 15 years: Higher monthly payment, less total interest, faster payoff.
• 30 years: Lower monthly payment, more interest paid, slower payoff.
• 20 years: A middle ground option some borrowers prefer.

Why this matters: Your loan term affects your budget, interest expense, equity growth, and approval odds.

Heads up: Even the same interest rate feels very different when spread over 15 vs. 30 years.

How to Choose the Best Mortgage Term?

Here’s a simple breakdown based on real borrower scenarios:

1. If You Want Lower Payments:

Go with a 30-year term. It stretches your loan out, reducing your monthly obligation.

Best for:

• First-time buyers
• Borrowers with variable income
• Families need flexibility.

Pro Tip: Just because you choose a 30-year doesn’t mean you can’t pay extra to knock down interest.

2. If You Want to Save on Interest:

Choose a 15-year or 20-year loan term.

Best for:

• Higher earners
• People closer to retirement
• Equity-focused borrowers.

Case Example:
A $300,000 loan at 6.5% interest over 30 years costs $383,000 in interest. A 15-year loan at the same rate costs just $170,000.

3. If You Want Balance:

A 20-year mortgage gives you a bit of both worlds: decent payment, lower interest.

Pro Tip: Ask your lender if this is available; it’s often overlooked but valuable.

Questions to Ask Yourself:

• How long do I plan to stay in this home?
• Is my income likely to rise or stay flat?
• Do I want to retire early or later?
• How comfortable am I with risk?
• Can I handle a higher payment without stress?

Don’t worry, we’ve got you: A licensed mortgage advisor can run real-time calculations based on your actual numbers.

Get Expert Help—Without Commission Pressure

reAlpha empowers you to explore commission-free homebuying with tools that prioritize your financial health, not a broker’s bottom line.

Be My Neighbor connects you with licensed professionals who explain your loan term options clearly and comply with every regulatory standard. (NMLS #1743790)

Together, they’re reimagining mortgage experiences.

Conclusion: Pick a Term That Fits You, Not Just the Norm

Choosing a loan term isn't just a numbers game, it's about your life, your goals, and your pace.

Whether you want the cost control of a 30-year loan or the interest savings of a 15-year loan, the key is having the right support system.

Start your journey with reAlpha, the commission-free platform that puts you first. And Be My Neighbor is there with licensed guidance to back every step you take.

FAQs

What’s better: a 15-year or 30-year mortgage?

Depends on your goals. 15-year loans cost less overall but have higher payments. 30-year loans are easier to pay monthly but cost more in interest.

Can I switch loan terms later?

Yes. You can refinance into a different term if rates and credit qualify.

Does choosing a longer term affect my chances of approval?

It can help. Lower payments reduce your debt-to-income ratio, making approval easier.

Is a 20-year mortgage a good idea?

Yes. It's a smart middle ground for borrowers who want to save interest without stretching their monthly budgets too tight.

Disclosures:

• Be My Neighbor is a licensed mortgage broker. NMLS ID #1743790.
• All mortgage-related decisions should be discussed with a licensed loan officer.
• This blog does not constitute financial advice. Rates, terms, and conditions may vary and are subject to lender approval.
• Realpha operates as a homebuying platform and does not provide loan products directly. It partners with vetted brokers and lenders for the borrower's benefit.
• Mortgage rates and programs may change without notice. Always verify with a live rate quote from a licensed source.