This is the most commonly used mortgage plan. Your monthly payments are lower than they would be on a shorter (15 year FRM) term loan. The interest rate is locked in when you secure the mortgage and does not change over the life of the loan.
Advantages:
Fixed monthly payments over the life of the mortgage.
Longer life, lower payments.
Fixed interest rate over the life of the mortgage.
Can refinance if rates go down
Disadvantages:
Interest rate higher than 15 year FRM and VRM.
Interest rate does not change if rates go down.
Total interest paid over the life of the loan is much higher than a shorter term mortgage.
