The traditional 30 year fixed rate mortgage offers a high degree of stability. It's a good choice if you think that interest rates will rise. The 30 year conventional mortgage loan generally requires the lowest monthly payments. With a 15 year conventional mortgage loan, you can payoff your home in half the time by paying more each month. Many borrowers find that when interest rates are relatively low, a shorter term offers a significant financial advantage.
Interest accrues on the unpaid principal balance.
The shorter your payment period, the less interest you pay over the life of the loan. The drawback is that monthly payments are somewhat higher than with the equivalent 30 or 40 year mortgage. Properties that qualify include single family homes and up to four units.