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Mortgage: Whether to get a 30 or 20 year mortgage

Choosing a mortgage is one of the most important choices a homebuyer will make aside from choosing the best home they can.

Millions of Americans purchase homes, and it’s one of the biggest decisions they’ll make in their lives.

The best plan is to speak with a professional who would know what goes into an almost lifetime commitment loan.

Every person has a different life and circumstances, so what may make sense for one won’t for another.


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This means you should educate yourself on the difference between a 20 year and 30 year fixed mortgage.

20 year mortgages

A fixed rate 20 year mortgage will let the lender give you the capital for the home.

You will pay that amount as well as interest for 20 years.

That equates to 240 payments.


With a fixed rate, the rate will not change over those 20 years.

This type of loan will result in a lower interest rate because you aren’t borrowing the money for as long.

The monthly payment will be larger than a 30 year mortgage.


30 year mortgages

A 30 year fixed rate home loan is the same as a 20 year for the most part.

The difference is you pay the loan back for 30 years, or 360 total payments.

The monthly payments will be lower in comparison but the interest will be higher.

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Which mortgage do applicants get and why?

Mortgage lenders will look at your credit score and see how you manage your credit.

A 740 or higher is considered excellent.

This doesn’t mean a lower score can’t get a mortgage, but it may not be as good.


Your debt to income ratio is considered as well.

Overall, a 20 year mortgage would be ideal if you can afford the higher monthly payments.

If you plan to stay in the home for years to come, a 30 year mortgage is not a terrible idea either.

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