What Mortgage Term Length Is Best? Could It Pay to Look Beyond the 30-Year Standard?

by | Feb 25, 2022 | Mortgage Facts | 0 comments

Wondering what the best mortgage term length is? Read on to find out!

When choosing a mortgage, you will need to determine the mortgage length, i.e., the home loan duration, which typically ranges from 10 to 30 years. It essentially means how long it will take you to pay off the loan based on your regular monthly principal and interest rate.

Your choice will determine how much interest you pay to the lender over time. For instance, a 15-year loan has a higher monthly mortgage principal than a 30-year mortgage plan. However, it won’t be double the amount since you will have to pay less interest because of the shorter loan length. But the higher amount can stretch your budget thin, so you need to determine if it’s the best option for you or not. 

Standard 30-Year Mortgage Term

The 30-year fixed mortgage plan is the most popular type of mortgage. It offers the borrower a 30-year loan term and a fixed interest rate for the loan’s entire life. Most adjustable-rate loans also provide you with a 30-year loan term, but they come with adjustable interest rates. These mortgages will adjust monthly or annually for the entire duration. For instance, a 5/1 adjustable-rate mortgage, due to be amortized in 30 years, is adjustable after five years, which means that it has a fixed interest rate for the first 60 months, and the rate will continue to adjust for the remaining 25 years. 

While many people choose the standard 30-year mortgage plan, it doesn’t hurt to look beyond it to find a plan that works for your specific needs. Let’s look at the other mortgage term lengths:

15-Year Mortgage Terms

If you have chosen to look for other mortgage plans, you can assess if a 15-year term will work better for you. It’s the next most chosen loan amongst prospective homeowners. These loans require a significantly higher monthly mortgage payment due to their shorter amortization period. However, if you have the budget to go for this shorter-duration loan, you can end up saving a lot of the interest rate, and the loan is also paid off in half the time. 

These loans offer a lower interest rate than the 30-year plan. Moreover, these are also fixed-rate mortgages, so you don’t have to worry about paying off a higher adjusted rate while trying to pay off your mortgage early. When choosing this type of loan, it will be easier for you to find a lender offering a discount because of your shorter mortgage repayment plan. 

So, if you can afford to pay a significantly higher monthly principal, these loans might be more suited for you than the 30-year mortgage plan. These loans work best for individuals who live in areas where home prices aren’t too high, as the difference in monthly payments of these loans compared to the 30-year plans will be negligible. 

Other Mortgage Terms Offered by Lenders

Other mortgage terms lenders offer include the 10-, 20-, 25-, and 40-year plans. However, not all private lenders and banks are willing to offer these varied terms. Meanwhile, some lenders also allow you to choose your specific home loan terms, allowing you to choose the term that works best for you within a defined range. 

So, you can pay off your mortgage loan in around a decade or stretch it out to 40 years. Suppose you’re wondering what the best mortgage term is; you should assess your financial condition and distinctive needs to determine the best term for you, instead of going with the popular opinion. For instance, if a 15-year term is too quick for you, but you don’t want to pay the higher rate of a 30-year plan, you can assess the 20- or 25-year plan. 

Average Mortgage Terms Are Much Shorter

Most homeowners don’t hold on to their mortgages for a full term. Instead, they often keep their mortgage for less than a decade and then refinance the mortgage or sell the house. So, you will need to consider your plans if you wish to save money on the mortgage and choose the one that works best for you.

For instance, if your plan is to refinance or sell the property after a few years, a shorter and cheaper adjustable-rate mortgage might be your best option because you will have to pay a lower interest rate. 

What Is the Best Mortgage Term?

If you want to determine the best mortgage term for yourself, you need to consider how long you plan to keep your home and the affordability of your preferred loan term, among other deliverables. For instance, if you want to change homes within a few years, you might not benefit from a 30-year loan plan.

Alternatively, if you want to remain settled in your new home for a long while and don’t have the budget to pay a higher principal, you might benefit from a long-term mortgage plan, such as the 30- and even 40-year fixed plan. Even though the interest rate will be higher, the loan will suit your budget. 

Choosing a longer-term plan initially will also give you the opportunity to apply for refinancing when your financial condition improves or the interest rate drops in the market. This way, you can repay the loan in a shorter duration and benefit from a lower fixed rate.

All in all, the best mortgage loan length will largely depend on what works the best for you. So, you need to find a reliable mortgage financer that can help you determine the best choice based on your requirements, goals, and budget.


Integrity Mortgage NMLS #1692497 can offer you a mortgage plan that works for your needs. If you want an appropriate mortgage repayment length based on your credit score and overall goals, get in touch with us today!


Submit a Comment

Your email address will not be published. Required fields are marked *