For many home buyers, the only real decision they have to make is whether to have a 15 or 30 year fixed mortgage rate? No-one wants a mortgage hanging around their neck forever but with home buyers entering the market later, an early repayment of this loan is important. Of course, there are many things to consider before agreeing to anything. It is important to make sure that the interest rate does not change over the course of the loan.

It seems that some lenders are happy to offer deals that appear too good to be true and they usually 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.

Having a realistic, sustainable monthly payment on our mortgage was important even though we wanted to pay off our debt as soon as possible. As well as thinking about loans of 15 years, we also considered fixed rate mortgages that lasted 30 years as well. Because we did not want to have a mortgage close to retirement, we hoped we would be able to afford a shorter 15 year fixed rate mortgage. There was obviously very good reasons to finish paying the loan off early.

After careful consideration we decided to take the longer term 30 year repayment option instead of the 15 year plan. 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! The contribution my wife made to the monthly finances would be unreliable since she intended to raise our child at home. Unfortunately, a higher monthly payment was the downside for loans with a 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. The monthly payments on a 30 year loan were quite a bit lower.

We found that if we could make a few extra payments throughout each year then it would gradually reduce the principle sum owed. If you make a handful of extra payments throughout a twelve month period you can knock years off of your loan. It may be easier said than done, but this approach does pay off eventually. 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. Anyway, everything worked out fine despite our hesitancy.

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