15-Year vs 30-Year Mortgage for Rentals

Compare 15-year and 30-year mortgages for rental property. Monthly payments, total interest, cash flow impact, and which builds wealth faster.

15-Year Mortgage

PROS

✓Lower interest rate (typically 0.5-0.75% less)

✓Build equity twice as fast

✓Own property free and clear sooner

✓Less total interest paid

✓Forced savings through higher payments

CONS

✗Higher monthly payment — hurts cash flow

✗Harder to qualify (higher DTI)

✗Less cash available for other investments

✗Negative cash flow risk if vacancy hits

✗Opportunity cost of locked-up capital

30-Year Mortgage

PROS

✓Lower monthly payment — better cash flow

✓Easier to qualify

✓More capital for additional properties

✓Better DSCR ratios

✓Flexibility to pay extra when able

CONS

✗Higher total interest over loan life

✗Slower equity buildup

✗Higher interest rate

✗Longer debt obligation

✗Less forced discipline

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