What Is the Best Loan Term Financially?
The best loan term per homebuyer varies. Some benefit from the 15-year term. Others fare better with the 30-year term. To start the process it’s a good idea to have a realistic perspective. Homebuyers benefit from being honest about their finances. A $2,000 monthly repayment for 30 years requires a consistent commitment. A $3,5000 monthly repayment for 15-year requires fiscal responsibility.
Obtaining a 15-year term means paying a higher monthly repayment. In addition, the homeowners own the property outright faster. Plus, they pay less interest rate charges. Homeowners who obtain a 15-year term can save at least $100,000 overall. Since the $100,000 spreads out over 30 years, homeowners don’t notice the charges.
Qualifying for a conventional mortgage has become more difficult. Therefore, Australians are obtaining variations such as low doc, low deposit, and interest-only mortgages. In these cases, getting your foot into the homeownership door is better than remaining a renter. Then, you have the opportunity to refinance the home loan and obtain better terms a few years into it.
Mortgage House is a non-bank lender that works with a variety of homebuyers. Our loan specialists can outline the benefits of 15- and 30-year loan terms. They have the tools to help homebuyers determine if their finances can handle the mortgage repayments in each scenario.
You can try our mortgage repayment calculator online for free too.
What Is the Best Loan Term Conclusion
The best loan term for a homebuyer is the one that they can comfortably repay in full and on time. Mortgage House loan specialists can delve deeper into the best terms for most homebuyers. Contact our team today.