In certain parts of the country, a 15-year plan makes more sense than a 30-year mortgage.
With the Federal Reserve set to raise interest rates—increasing mortgage rates and monthly payments, and reducing purchasing power for new borrowers—homebuyers may be turning to 15-year mortgages, Trulia reports.
While 30-year mortgages have lower monthly payments, higher borrowing power, and better tax benefits, 15-year mortgages provide quicker equity and lower interest rates. The main advantage is that a larger share of each monthly payment goes towards paying off the loan principal.
Trulia found the 10 best markets for maximizing equity after five years. The top four are in Ohio, with Dayton leading the pack ($22,018 in equity with a 15-year mortgage, 2.37-times greater than the $9,295 gained from price appreciation), followed by Cleveland, Toledo, and Akron.