30-Year mortgages: A brief guide

by Ann Hayward 01/08/2024

Most homebuyers, even those just starting their first-time homeowner journey, have learned a thing or two about 30-year mortgages. For example, some 30-year mortgages will let you pay the mortgage down earlier than 30-years, while others may fix a prepayment penalty to that plan to make up the loss in revenue from the interest rate.

But what about some of the more uncommon questions and features of 30-year mortgages? Here’s a quick guide to understanding some nuances of 30-year mortgage rates:

Are there different 30-year mortgage rates?

While this question may seem obvious to some, there are a few tricky aspects about mortgage rates. One being the amount of options a homebuyer has when searching for a mortgage, which lends to several rate choices to pick from.

Mortgage rates often factor in a great deal of variables, such as buyer's market versus seller's market, personal financial health, economic stability, Federal Reserve action, mortgage lenders and a host of other facets. Once everything has been considered, lenders typically determine an individual mortgage rate for the specific potential homebuyer wanting to make an offer.

Are 15-year mortgage rates better?

Depending on your financial situation and what you want out of your loan, a 15-year mortgage could work out better for you. However, the same is true for a 30-year mortgage. So, how do you tell which one you should go for? Review your current monthly responsibilities.

For those wanting to keep their payments low and affordable, a 30-year mortgage may be a better fit since the monthly mortgage payment is likely to be lower than that of a 15-year mortgage. 30-year mortgages are also great for those who want to plan out their financial journey for the next few decades.

However, for those who may not want to be locked into a 30-year fixed mortgage with the potential for prepayment penalties, a 15-year may be a great option for you. Just remember, there’s a good chance your payments will be higher than those of a 30-year mortgage, depending on property and down payment, as does a 30-year.

What about jumbo 30-year mortgages?

For those wanting to purchase a larger home at a larger price point, 30-year fixed rate mortgages come in jumbo sizes. Jumbo loans are great for homes with higher price points and are often subject to the same base terms as your average fixed-rate mortgage. The difference is these loans typically have to exceed the average loans that cap their lending maximum.

What else should I remember about 30-year mortgage rates?

Mortgages can come in all varieties of sizes, shapes and interest rates. While an adjustable rate mortgage may fit some budgets (remember, these interest rates change throughout the loan), a fixed rate mortgage may give others security in knowing what their monthly payments will be year in and out.

Be sure to shop around for the mortgage that suits you best. However, don’t ignore your agent’s connections. They may know a lender who can get you everything you need in a mortgage and help you keep your financial health through the homebuying process.

About the Author

Ann Hayward

Born in Philadelphia and raised in the suburbs, Ann Hayward got her Pennsylvania real estate license at age 18 even before going to college. This second-generation real estate professional followed in the footsteps of her father and two uncles, inheriting their passion for the business. Licensed in DC, Maryland and Virginia, Ann is accomplished in her career, with numerous designations including SFR, SRES, PSA, WHC, and multiunit Housing Development Finance Professional (HDFP) from the National Development Council. She specializes in Prince Georges and Montgomery Counties, Northern Virginia and Washington, DC, all jurisdictions where Ann has lived and knows very well. In addition to her professional expertise, she owns and manages personal investment property, understands and has been involved in the renovation/remodeling process, and has great resources which she shares with clients. When you hire Ann to represent you, she will make your buying or selling experience an enjoyable, rewarding one. Her compassion, sensitivity to her clients’ needs, eye for detail, and ability to see the big picture when guiding you through a purchase or sale are unique assets that will ensure your success. A diverse and relevant background also gives Ann a distinct edge. For 30 years, she worked in fast-paced, high-pressure television and theatrical production, attaining the highest achievement – DGA membership as a Director, and as an award-winning staff and freelance writer. Her keen audio visual skills and design sense benefit sellers in marketing their properties, and are invaluable in helping buyers see the potential of space. A true renaissance woman, Ann was also an income tax professional and office manager for H&R Block, so she thoroughly understands the tax and financial implications of acquiring and selling real estate. Her superior organizational skills are further evidenced as owner of a downsizing/professional organizing business, Managed For You, which allows her to connect with everyone from millennials to boomers and seniors, whether for small space planning or assisting with major decluttering and transitioning. Ann holds an AB in American History from Simmons College, Boston, plus attended Robert Wagner Graduate School of Public Administration where she was a candidate for Doctorate. She additionally studied Film Direction at the American Film Institute in LA, and was a Stanford University post-graduate Professional Journalism Fellow. Personally, Ann is an avid if not very good golfer, and the co-founder of a nonprofit 501c3 organization offering educational guidance, tutoring and counseling for youngsters from elementary school through college admission. She sits on the board of trustees of a nonprofit educational film production corporation as well. (202) 494-6252 [email protected]