3 Steps to Deciding a 30- vs. 15-Year Mortgage

Fifty-somethings should also weigh the pros and cons of paying off a mortgage in 15 years vs. taking out a 30-year loan that they'll still have to cover during retirement. Having a 15-year loan could mean knocking out your monthly mortgage payment right around the time you retire, but choosing a 30-year loan could mean more money to put into 401(s) and IRAs while you're still working -- plus a great mortgage-interest tax deduction once you've retired.

"People who are in line for a big pension and Social Security check and have plenty of retirement assets will have lots of cash flow in retirement," McBride says. "What they won't have enough of are tax deductions."

A middle course
Still unsure which way to go?

McBride suggests a third option -- taking out a 30-year mortgage and adding extra money in your monthly payment whenever you can afford to do so.

Most mortgages allow you to include such additional principal payments at any time with no prepayment penalties.

True, you'll have to pay a 30-year loan's higher interest rate -- but sending extra money whenever it's convenient will shorten the mortgage's term without firmly committing to a 15-year loan's heftier payments.

"You get the flexibility to pay ahead or not depending on your financial circumstances at any given time," McBride says.