Short Answer
The most common mortgage terms are 15, 20, and 30 years. A 30-year term offers the lowest monthly payment but the highest total interest. A 15-year term has higher payments but much lower total interest and builds equity faster. Choose your term based on your monthly budget, how long you plan to stay in the home, your other financial goals, and your risk tolerance. A 20-year term can be a middle ground between the two.
Your mortgage term significantly affects your monthly payment, total interest, and how quickly you build equity. A 30-year fixed-rate mortgage is the most popular choice because it offers the lowest monthly payment, giving you more cash flow for other expenses and investments. However, you pay significantly more interest over the life of the loan. On a $350,000 loan at 6.5%, a 30-year term would have a monthly payment of about $2,212 and total interest of about $446,000. A 15-year mortgage at 5.75% would have a monthly payment of about $2,906 but total interest of about $173,000, saving you over $270,000. A 20-year term splits the difference, with moderate monthly payments and less total interest. Consider your income stability, other financial priorities like retirement savings and college funds, and how long you plan to own the home. Some borrowers choose the 30-year for flexibility and make extra principal payments when they can, essentially creating their own shorter term.
Bob's Advice
Redfin Senior Agent · AI Certified Agent
There is no single right answer when it comes to mortgage terms. I have seen the 30-year work beautifully for buyers who want flexibility and lower payments. I have seen the 15-year work for buyers who want to own their home free and clear sooner. The most important thing is choosing a payment you can comfortably afford. You can always pay extra on a 30-year loan. You cannot lower your payment on a 15-year loan. Let us talk about your goals and run the numbers together.
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