15 year Mortgage with Balloon

[Adrian Jenkins]

I am about to invest in my first 2 bed 2 bathroom townhouse. My bank is offering me a 15 year loan with a balloon at end at 4.65%. Is this a good deal or would you rather go for a 30 year term? 

[Bill B.]

The rate seems high. But what you’ve said they’re offering doesn’t really make sense or at least make it obvious.

If you mean they are offering a 15 year loan amortized as 30 years (so you still owe 2/3rds of the original amount (about $66,700)) in 15 years and have to find a new loan that’s a horrible deal. 

What I am describing is lower risk to the bank so the rate should be less than a standard 30 year mortgage, not more. 

Get a quote for a regular 15 year and 30 year mortgage and then compare it to a mortgage broker. Most banks are the worst place to look for loans, excepting MAYBE, some small local banks.