A Look at the Cheapest Fixed Rate Mortgages

By Gugu Martini

Considering whether you need a 30 or 15 year fixed mortgage rate is important for people looking to buy a home and concerned about their monthly payments. Many of us are buying homes later in life these days so it is not unreasonable to have the house paid off early. There are always things to take into account before signing documents. It is always a good idea to confirm that the interest rate does not alter during the term of the mortgage.

Steer clear of lenders that are offering unbelievable deals because they probably are. Loans agreed with a 15 year fixed mortgage keep the same interest rate throughout the entire life of the agreement. For those individuals that do not like hidden surprises, this is always a benefit. My wife and I looked into the loans available with 15 year fixed mortgage rates when we were searching for a home for sale.

Even though it was important for us to pay off our loan at the earliest possible opportunity, we did not want high, unrealistic monthly payments which we would have trouble maintaining. It became obvious that we had to look at fixed rate mortgages over a longer period and not just 15 year plans. We did not really like the prospect of having a mortgage as we approached retirement so were really hoping to get one of the loans with 15 year fixed mortgage rates. We were worried about the emphasis placed on early completion of the mortgage.

After taking everything into consideration we decided on a 30 year loan instead. There were many things that factored into this decision.The main reason was that I found out my wife was pregnant. My wife was going to raise our child from home so her addition to the monthly income would be restricted. Our monthly payment would have been too high if we had committed ourselves to the 15 year fixed mortgage plan. We could see the financial problem of getting in too deep even though there were benefits to a shorter loan period. Despite the trepidation of having a longer term loan, it did reduce the repayments considerably.

Being able to make additional lump sum payments during the year means the outstanding loan reduces faster. My making just a few of these payments each year we discovered that a number of years could be taken off the mortgage term. This is well worth it in the long term but it does require some discipline. Our first choice would have been to go for the short term 15 year fixed rate mortgage solution but this did not help with our more immediate situation. Despite all our worries, things turned out well for us and we do not regret the decision.

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