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A 30 year fixed mortgage is a home loan with one rate for all 30 years. Because the rate never changes, your principal and interest payment stays the same. Taxes and insurance may still go up or down. Even so, this loan is easy to plan around. It also works for both a home purchase and a refinance.
You repay the loan in equal monthly payments over 30 years. At first, most of each payment goes to interest. Over time, more of it goes to your loan balance.
Since you have more years to pay, each payment is usually lower than on a shorter loan. As a result, you may have more room in your monthly budget.
Benefits
Trade-offs
Both loans have strengths. The right choice depends on your budget and goals.
A 30-year loan usually has a lower monthly payment. In contrast, a 15-year loan usually costs less in interest. It also builds ownership faster.
Want a mix of both? Take the 30-year loan, then make extra payments when you can. That way, you keep a lower required payment. Still, you can pay down the loan faster. However, check your loan terms first, since some loans limit early payoff.
Ready to compare? See our 15 year fixed mortgage page.
This loan may fit if you want a steady payment. It may also suit you if you plan to stay in your home for a long time. In addition, it helps if you prefer a lower required payment.
Another loan may work better if you can afford a higher payment. The same is true if you plan to move soon. Likewise, a shorter loan may suit you if you want to be debt-free sooner.
If you are unsure, we can help. You can also try our mortgage calculator to test different loan terms.
Lenders look at the full picture. First, they review your credit history. Next, they check your income and work history. They also look at your monthly debts. Finally, they consider your down payment and the home you plan to buy.
Rules vary by lender and loan type. For example, FHA loans, VA loans, and USDA loans each have their own standards. Likewise, jumbo loans follow their own rules.
The best way to learn more is to ask. We can review your situation and explain your options.
Yes, many homeowners do. For example, some want a lower payment. Others want to leave an adjustable rate. Some take cash out of their home.
However, refinancing has costs. So, compare the new rate, payment, and fees before you decide. Our refinance calculator can help.
The 30-Year Fixed Rate Mortgage Loan Process
Here’s how our home loan process works:
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As a rule of thumb, it may be easier to qualify for fixed-rate loans than for adjustable rate loans. When interest rates are low, fixed-rate loans are generally not that much more expensive than an adjustable-rate mortgages and may be a better deal in the long run, because you can lock in the rate for the life of your loan.
