How 30 Year Loans Differ from 30/15 Mortgage Loans

Lenders offer a 30/15 because the rate is often a little better than straight 30 year fixed.

Statistically, most people keep a mortgage for seven years and most homeowners live in the same house for 14 years, so, they never get to the 15 year balloon part.

The advantage is on larger loans. If your loan is under $417,000 forget the balloon.

30/15 means thirty years mortgage payable in 15 years. this is type of balloon mortgage.in this case you have to do payment for 15 years and remaining principle can be paid in single installment.this is single balloon payment.thus loan is amortized over a longer period of time than the actual term of the loan.


this type of loan can benefit some consumers for several reasons.

1) interest rate are less that plain 30 years mortgage.
2) you can save money for final single balloon payment.
3) flexibility in mortgage.
4) only priciplal amount has to pay after 15 years.
5) saving more money in terms of interest paid during tenuare.
6) can refinance loans at lower interest rates

Most of the times everyone prefers 30 years fixed loan. As the problem with paying off balloon payment when it comes due, they will be forced to refinance their loan.

It is frequently better to lock in a rate and a payment that will stay the same rather than thinking in future on interest rates being lower when your 15 year fixed term ends on a 30/15.