15-year fixed rate vs. 30 year fixed rate when trying to expand

[Lexi Narducci]

I bought my first home in August 2020 and took out a loan of $450,000 with a 2.5% interest rate over a fixed 30-year period. Not surprisingly, most of my monthly payments are going towards interest with the 30-year fixed loan. My question is: should I switch to a 15-year fixed loan and put more money towards my mortgage on my current property so that I am paying more on the principle rather than interest or should I continue with the 30-year fixed rate so that although I'd pay more in the long run, I am paying a lower price each month, allowing me to save up to purchase a property to rent out and make a profit off that? 

I am open to the idea of investors so that I can grow more quickly, but I would definitely need to purchase my first investment property and prove that I can be successful before finding investors. My end goal is to do long-term furnished housing in cities.

Any help would be appreciated. Thanks! 

[Kyle J.]

@Lexi Narducci  There is no one-size-fits-all, or only one right answer, to this question.  It's been debated on here a million times, and the answer always comes back to what is right for the individual and their specific goals.  

However, with that being said, generally speaking if you're still in the early stages of your investing career and working on acquiring your first investment property and expanding your rental portfolio, you will be much better off going with 30 year mortgages. There are many reasons for this, such as being able to lock in long-term low rate financing. But the main reason is that 15 year mortgages at this early stage of your investing would likely cause problems with your DTI ratio as you grow since the required payments would be much higher.

Now you could always make extra principal payments towards your 30 year mortgages and pay them off as if they were 15 year mortgages if you REALLY wanted to do that. You don't need to refinance to do that. And that way that higher payment wouldn't be required and wouldn't count against you in your DTI ratio as you continued to grow and try to qualify for additional mortgages.

Just something to think about.