15-year mortgage
A mortgage paid off over 15 years. Higher payments but far less total interest, and usually a slightly lower rate. Common for refinances.
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Part 1 of 4
Why a seller cares
A 15-year loan pays down principal fast, so a seller who has one has more equity than a neighbor on a 30-year at the same age of loan. It matters most when you are choosing the loan on the next home.
Part 2 of 4
A simple example
You borrowed $240,000 at 6% eight years ago. On a 15-year loan the balance is about $130,000; on a 30-year it would be about $211,000.
| The loan after eight years | What is left to pay off |
|---|---|
| 15-year at 6% | About $130,000 |
| 30-year at 6% | About $211,000 |
| The difference in equity | About $81,000 more in your pocket at closing |
Shorter loans cost more each month and leave much more at the sale.
Part 3 of 4
What people get wrong
That the 15-year rate is the only benefit. The bigger one is how quickly the balance falls.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
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