Get a 15 year home loan and save on interest or get a 30 year loan and save for retirement?

Well if you watch a lot of TV, then you are probably seeing Quicken and other lenders force borrowers into a 15 year home loan, and that is because they are trying to make some easy money on your back.

15 Year fixed has a few side issues that most people don’t know and the lenders won’t mention.

First off, it is hard for a borrower to qualify for the 15-year fixed due to the high payment, so it pushes the debt ratio higher (which is commonly an application killer). In addition, when you sign up for a 15-Year fixed, you are in what is called a “payment shock.” Payment shock is a situation where your payment almost doubles, and this may lead to some lifestyle changes to accommodate the unexpected shift.

Aside from all that, it is important that you focus on your ability to do something else with the money during the term; this is more valuable. For example, remodeling will increase the value of your home and could be a better return over the long run.

As a matter of fact, if you take the additional payment that you have to shell out for a 15-year loan and applied it to an index fund, you would likely be a multi-millionaire by the time you retire.

For your mortgage comparison shopping, check out Parlend’s Mortgage Comparison Shopping tool, that will help you in finding a fair rate and cost in real time, while keeping you anonymous.

Check out our free mortgage shopping tools at

This question was initially answered in Quora by our co-founder and mortgage ninja Kevin. View in Quora

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