30yr fixed 4.75% or 15yr fixed 3.5%

6 Replies

The montly payments difference of these two rates is around $400. At one side, 15 yr will help cummulate more equity. But 30yr will provide more cash flow. This will be my first investment property. I plan to get more. I don't have a specific strategy yet. For now, i am just betting on house value appreciation.  Which one should i choose? 


A) Buy for cash flow. Appreciation is gravy - though in some markets it can be the meat. 

B) Because of A, do the  30yr.  - it will allow you to build funds toward your next acquisition sooner.  

Thanks Doug! I agree with you but just want to give away 1.25% rate difference. 

If you already bet on appreciation, it is better to secure cash flow. If the spread between 30 years and 15 years is $400 monthly, you must have a substantial loan in mind. Security in financial investments is important.

That is a real good point. when rates go up next year, longer term loans do provide securities. The loan amount is 330k.

1)  How long do you intend to hold the property for?

2)  Do you "need" the extra $400, either to cover monthly expenses, or to help with your debt-to-income on other deals?

I think the answers to these two questions should let us help with an answer.......

Originally posted by @Diana Tian:

Thanks Doug! I agree with you but just want to give away 1.25% rate difference. 

You're NOT giving anything away.  You're buying 15 MORE years of flexibility for only 1.25%.  Pretty good deal.

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