Two loans have the same interest rate and maturity. Loan A has a 15-year amortization rate. Loan B has a 30-year amortization rate. In comparing these two loans from a borrower’s perspective:
The advantage of Loan A is lower monthly payments and lower balloon payment at maturity.
The advantage of Loan B is lower monthly payments and lower balloon payment at maturity.
The advantage of Loan A is lower monthly payments but its disadvantage is a higher balloon at maturity.
The advantage of Loan B is lower monthly payments but its disadvantage is a higher balloon at maturity.