There is always a debate when home buyers have to decide on the merits of 15 or 30 year fixed mortgage rates. Of course the goal for most people with a mortgage is to pay it off early and save themselves a great deal of money in interest repayments. There are always things to take into account before signing documents. Ensuring the repayment remains the same throughout the mortgage term is very important.

It is always wise to avoid agreements that do not appear to have any negative aspects because they invariably have but are hidden. The interest rate should remain the same for fixed rate mortgages until the loan is repaid. For many people with regular incomes, this is a definite benefit as there are no hidden charges. Both my wife and I decided to research fixed rate mortgages when we started looking at homes for sale.

Having a realistic, sustainable monthly payment on our mortgage was important even though we wanted to pay off our debt as soon as possible. It became obvious that we had to look at fixed rate mortgages over a longer period and not just 15 year plans. Because we didn’t still want to have a mortgage close to retirement, we hoped we would be able to afford a shorter 15 year fixed rate mortgage. It wasn’t easy for us because of the stress to pay the house off early.

After taking everything into consideration we decided on a 30 year loan instead. There are always a number of points to think about when a decision like this has to be made. Finding out my wife was having a baby made making the choice so much easier! My wife was going to raise our child from home so her addition to the monthly income would be restricted. The problem we could see was the increased financial commitment on a monthly basis if we had opted for the 15 year fixed mortgage rate. We could see the financial problem of getting in too deep even though there were benefits to a shorter loan period. After looking at the much lower amount we would be paying per month with a 30 year mortgage loan, there wasn’t any option but to go with it.

If we have spare cash throughout the year then we can use it to reduce the capital sum. Those few extra payments also help reduce the number of years you have to pay the loan over. It may be easier said than done, but this approach does pay off eventually. We would have much preferred to have taken out a loan with a 15 year fixed mortgage rate but we had to consider our other commitments as well. Things worked out well anyway, even though we were unsure about it to start with.

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