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- terms and rates
Lenders will typically offer a range of repayment schedules for primary mortgages. The two most common repayment schedules are 15 and 30 years. Secondary mortgages tend to feature shorter repayment periods that will vary by lender. Under most market conditions, a 15-year mortgage will have a lower interest rate than a 30-year mortgage. In addition, if you were to hold your mortgage for the full term, your total interest paid would be significantly less with a 15-year mortgage.
Finding the right terms for your needs
As with comparing fixed versus variable interest rates, an important question to ask yourself when selecting repayment terms is, "How long do you plan to live in your house?"
- Planning to stay. If you plan to live in your house for the full term of your mortgage, you'll probably want to look for ways to reduce your interest rate and reduce the total amount of interest that you'll pay over time. Choosing a repayment schedule with a shorter term (and higher payment) can be a smart way to accomplish this.
- Planning to sell. However, if you plan to sell a house within five to seven years, reducing your interest rate may be less important than finding a monthly payment that suits your budget. Because of the many different variables involved, you may want to use our fixed rate or adjustable rate calculator to determine which type of loan may be right for you.
In addition, your Chase loan officer is available to help you consider your options.
Comparing the APRs of two different lenders on the same type of loan, such as a 30-year fixed mortgage, will help you make more of an "apples-to-apples" comparison.
