Is A 15 or 30 Year Home Loan Better for Your Santa Cruz Home?

Posted by Lauren Spencer on Sunday, November 25th, 2012 at 1:01am.

Homebuyers have many choices to make when purchasing a Santa Cruz home and one of those choices has to do with the length of the loan.  There are pros and cons to both the 15-year mortgage and the 30-year mortgage and the answer may not necessarily mean that one is “better” than the other is; it simply depends on what the homebuyer’s needs are.

The 15-Year Mortgage

If you choose the 15-year mortgage, your monthly payments may be higher than a 30-year loan would be, but your interest rate will be lower.  Additionally, by going with the shorter loan, you will build equity faster than if you went with the longer loan. 

Equity simply means the amount of ownership in your Santa Cruz home.  If you have 25% equity, you own 25% of your home.  You pay a little more monthly, but you have a lower interest rate; build equity faster, and own your home in 15 years. 

The 30-Year Mortgage

Many people that opt to take advantage of the 30-year mortgage do so because the monthly payments are lower, and thus, more affordable.  This allows homebuyers to choose homes in a higher price range than they could afford if they went with the 15-year loan.  Though monthly payments may be lower, the interest rate on 30-year mortgages are higher, so in the long run you end up paying a considerable more amount of money back in interest as opposed to the shorter loan.

Which One Is Right For You?

The loan you decide to take advantage of depends on your financial picture in the present, as well as your goals regarding long-term wealth.  If you can adequately pay the higher monthly amount for the 15-year loan with no financial stress ensuing, then this would be your best option because the interest rate is lower and you own your Santa Cruz home in 15 years.
If your current financial picture does not leave you with a lot of money at the end of the month, it is probably better to go with the lower monthly payments of the 30-year loan.  You will end up paying a lot more interest in the end, but you will be able to comfortably afford your new home. 

There are pros and cons to both home loans, so consider the varying factors before making a decision.  You can discuss the matter further with a mortgage loan professional or your real estate agent. Call me at 831.662.6522 or email me at if you are ready to discuss this in more detail.

For additional information please visit my home page at


Monthly Payments

15-year loan

Pros and Cons


About Lauren Spencer

Award-Winning Santa Cruz REALTOR®

Lauren Spencer is your local real estate expert, specializing in Santa Cruz real estate and surrounding communities—this is where she lives, works, and plays too. Let her know your questions about the community and county and she'll be happy to fill you in on all you want to know! Lauren Spencer has consistently been voted best local REALTOR in Santa Cruz and is always happy to offer her advice and expertise. Call her at: 800.226.4717.

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