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Which is Better - A 15 Year or 30 Year Fixed Mortgage?

Which is Better - A 15 Year or 30 Year Fixed Mortgage?

It really depends on your situation and your financial goals.

As the name implies, with a fixed rate mortgage, the interest rate is set at the time you take out the mortgage and remains constant over the life of the mortgage. The monthly payment level also remains constant. Knowing what your payment will be can be reassuring.

Each monthly payment is comprised of interest and principal with early year payments being primarily interest and payments toward the end of the mortgage being mostly principal.  Most of the mortgage pay down comes late in the mortgage period.

The benefit of the shorter 15-year mortgage is that after 15 years you will have paid off the mortgage loan and you own your home free and clear. You will also pay less interest over the life of the mortgage. The negative is that your monthly payments will be higher. 

Comparing a 15-year mortgage and a 30-year mortgage

Example

15-year mortgage

30-year mortgage

Mortgage amount

$100,000

$100,000

Interest rate

6%

6%

Monthly payments

$843.86

$599.55

Total monthly payments over the term of the mortgage

$151,893.80

$215,838.45

Total principal paid over the term of the mortgage

$100,000.00

$ 100,000.00

Total interest paid over the term of the mortgage

$51,893.80

$115,838.45

When shopping for a mortgage, be sure to consider the rate and the term.  Often the interest rate on a 15-year mortgage may be a bit lower than the rate on a 30-year mortgage, even from the same institution. 

Choosing the term of a fixed rate mortgage is usually a function of what level of monthly payments you can afford, how anxious you are to pay off the entire mortgage and any rate difference with the different terms.

We at MutualBank are here to help you each step of the way. Call your MutualBanker at 800-382-8031 to start finding the right solution for you. 

Apply Online 

Check Rates

Contact a Representative Today

Back to Education Resources

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  • Mutualfirst Financial, Inc. Announces Agreement With Major Stockholder 

    Muncie, Indiana - February 27, 2015 – MutualFirst...

    Monday, March 2, 2015

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Mutual Blog

Proactive Steps to Take in Light of Anthem Data Breach

Chances are you are a person who has Anthem insurance coverage or you know someone who does. As a result, either you or your friend has a reason to be concerned.

A typical data breach includes a compromise of debit card numbers or partial personal identifying information. This kind of breach, though inconvenient, can typically be ‘fixed’. An initial investigation indicates that the Anthem breach includes a compromise of name, birthday and/or social security number. This kind of information is all one needs to steal someone’s identity.

According to Anthem this particular breach could affect up to 80 million people. Instead of trying to ignore this has happened or just being upset, it’s now time for you to be educated and try to protect yourself as best as you can. We have some tips that will help you accomplish that.


1. Review Your Statements


First, take a moment each month to view your eStatement or monthly statement. You can monitor your accounts throughout the month with Online Banking and the MutualBank App. Monitoring your accounts will give you the quickest opportunity to see if your accounts have been compromised. If you notice any transactions that are unfamiliar or questionable, please get in touch with your MutualBanker. Call us at 800-382-8031.


2. Be Cautious with Any Anthem Emails You Receive


Next, if you receive an email stating it is from Anthem, be cautious. Anthem’s website warns customers not to reply with information, click any links or open any attachments within the email. Anthem is not calling their customers and will not ask for information. Never give your credit card information, social security number, or other sensitive information to someone via email or over the phone.


3. Consider Freezing Your Credit


If you are a resident in Indiana, the Attorney General’s office website (http://www.in.gov/attorneygeneral/2853.htm) is offering and encouraging you to sign up for a free credit freeze with each of the three credit bureaus. A credit freeze places a hold on your credit where a new line of credit could not be obtained without you unfreezing your credit. This doesn’t affect already open credit lines like an existing credit card, yet helps to protect you against someone opening new lines of credit in your name.


4. Keep in the Know


Finally, try to keep in the loop on the Anthem Breach. The best source for current information about this breach can be found at Anthem’s Frequently Asked Questions. (http://www.anthemfacts.com/faq)

MutualBank is here to help inform you of ways to help protect against identity theft. Thank you for trusting us.

Sunday, February 15, 2015

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Which is Better - A 15 Year or 30 Year Fixed Mortgage?

Which is Better - A 15 Year or 30 Year Fixed Mortgage?

It really depends on your situation and your financial goals.

As the name implies, with a fixed rate mortgage, the interest rate is set at the time you take out the mortgage and remains constant over the life of the mortgage. The monthly payment level also remains constant. Knowing what your payment will be can be reassuring.

Each monthly payment is comprised of interest and principal with early year payments being primarily interest and payments toward the end of the mortgage being mostly principal.  Most of the mortgage pay down comes late in the mortgage period.

The benefit of the shorter 15-year mortgage is that after 15 years you will have paid off the mortgage loan and you own your home free and clear. You will also pay less interest over the life of the mortgage. The negative is that your monthly payments will be higher. 

Comparing a 15-year mortgage and a 30-year mortgage

Example

15-year mortgage

30-year mortgage

Mortgage amount

$100,000

$100,000

Interest rate

6%

6%

Monthly payments

$843.86

$599.55

Total monthly payments over the term of the mortgage

$151,893.80

$215,838.45

Total principal paid over the term of the mortgage

$100,000.00

$ 100,000.00

Total interest paid over the term of the mortgage

$51,893.80

$115,838.45

When shopping for a mortgage, be sure to consider the rate and the term.  Often the interest rate on a 15-year mortgage may be a bit lower than the rate on a 30-year mortgage, even from the same institution. 

Choosing the term of a fixed rate mortgage is usually a function of what level of monthly payments you can afford, how anxious you are to pay off the entire mortgage and any rate difference with the different terms.

We at MutualBank are here to help you each step of the way. Call your MutualBanker at 800-382-8031 to start finding the right solution for you. 

Apply Online 

Check Rates

Contact a Representative Today

Back to Education Resources

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