Obviously, the longer term mortgage cost you more as the interest rate increased than the shorter term. However, taking into account all the circumstances, a shorter term mortgage may be a better choice for people who have enough money to afford a new house. Let FinanceGuider do a simple comparison between two terms of mortgage to help you make a wise choice when facing into taking out a mortgage.

The different interest rate among mortgages.

30-year mortgage’s interest rate is 4.625% and the total interest rate you paid through the 30 years will be 40.37% of your principal.  How ever, the 50-year mortgage’s interest rate is higher than 30-year’s. It’s mean that you need to pay more money. And you need to pay extra 20 years’ interest rate. It will cost you much more money by choosing a long term mortgage.

The advantage of 30-year mortgage.

As I have told, the short term mortgage cost you less money. And you save 20 years by making extra payments. While you may get a bad financial situation in the first 30 years, you get more freedom to enjoy life after this rough time. So, when coming to consider a mortgage, think about the shorter term first.

The advantage of  50-year mortgage.

It’s a safe net. It’s affordable as you need to pay less each month so that you had a cushion if something happened. But if nothing happens along the way, then this will have been a poor choice. If you have a bad financial situation, you may consider the 50-year mortgage to prevent from unsafety.

Choose which terms of mortgage may be difficult for you. It depends on current situation you are in. Focus on your needs and believe in you own decision. There is no ‘best’ choice for anyone.