Interest rates dropping to record lows. Some lucky people have locked in unreal rates as low as 2.5%. Many homeowners are taking the opportunity to refinance. The rates are so low in fact that going with a 15-year over a 30-year mortgage is now a viable option for many more Americans than before. Which brings us to the question, “Should I go with a 30-year or 15-year mortgage?”

On the surface, the choice seems pretty simple. With a 15-year, in return for a higher monthly payment, you’re knocking off years of payments, getting a lower interest rate, and paying substantially less overall through the life of the loan. A 30-year allows you to afford more house at the cost of slower principal pay down and an overall higher total of interest payments. Sounds easy enough, right?

Well not always. While everyone needs to figure out what loan product is best for them, and what they’re most comfortable with, I’d almost always recommend a 30-year loan for one key attribute: flexibility. With a 30-year loan, you’re able to make extra payments directly to principal each month, but when times are tough, say for instance you lost your job or a global pandemic shuts down the economy (just a wild example I’m sure will never happen… again, I hope) you can just stop paying extra. There’s no penalty and you’ve freed up your finances when needed it the most. 

If you’re in the market and weighing your options, consider going to the Additional Payment Calculator by Bankrate to see for yourself.