The 30 year mortgage is an industry standard, but is it the correct choice for you? Because the total payments are spread over a longer period of time as well as the entire time of the loan this was the top choice of the majority home owners.

Therefore , the positive side for a 30 year home loan is substantially lower monthly payments. However this positive factor is somewhat dimmed by the fact that you pay thousands extra in interest. But, your interest is 100% tax deductible which does lower your after tax cost. The 30 year mortgage offers you some flexibility in that if your financial situation should change and you have more money you can pay it off in less than 30 years, while keeping the low monthly payments. Your payments are smaller, so in reality you can buy a larger roomier home.

Following is an example of the interest difference with a 30 year mortgage rate and one of the other rates. On a 30 year, 100,000 dollar loan using 7% interest rate your monthly payment of interest and principle would be $665.30 dollars. Over the next 30 years you will have paid $139,511.04 in interest alone. Now with a 15 year home loan rate on the same amount you will pay $871.11 per month and over the following 15 years, you would pay $56,799 in interest. This would save you $82,712 dollars.

If you have the will power to invest the savings from the lower monthly payments, it could be a good choice to go with the 30 year mortgage. Especially if you can find an investment that the long term payoff matches or exceeds the savings on a 15 year mortgage. One other important factor to review is how fast you would want to accrue equity in your home or own it out right. Needless to say, 30 year mortgages take much longer to accumulate equity.

30 year home mortgages are certainly very popular and the vast majority of home buyers get 30-year loans because that is the longest home loan offered today. Many experts agree if they could acquire a 35- or 40-year loan, they most likely would. There are many other options to consider. Probably the biggest question you have to ask yourself when considering a home mortgage is what are your financial goals? What mortgage will help you reach that goal? It is clearly to your advantage to look into other loan options to meet your financial goals. It may surprise you that because of your personal situation there may be other loan plans plans more suitable for you.