![]() ![]() Then, we calculated the total interest and total mortgage amounts on our mortgage payoff calculator.Īs you can see, the 30-year mortgage would have you paying over $100,000 (that’s 33%) more than you’d pay with a 15-year mortgage! Here’s what your expenses would look like on a $240,000 home loan-whether you chose a 15-year mortgage or a 30-year mortgage:įYI: We calculated the numbers for both monthly payments on our mortgage calculator using principal and interest only. That means you need a mortgage for $240,000. Suppose you want to buy a $300,000 house and have a 20% down payment ($60,000). Plus, you’ll pay off your house twice as fast. But because the interest rate on a 15-year mortgage is lower and you’re paying off the principal faster, you’ll pay a lot less in interest over the life of the loan. On the other hand, a 15-year mortgage has higher monthly payments. So, over a 30-year term you’ll pay less money each month, but you’ll also make payments for twice as long and give the bank thousands more in interest. No surprises there, right?īecause a 30-year mortgage has a longer term, your monthly payments will be lower and your interest rate on the loan will be higher. Simply put, you’ll pay off a 30-year mortgage in 30 years, while you’ll pay off a 15-year in 15 years. 30-Year Mortgage: How Are They Different? But which one is better?Īt Ramsey, we’ve been teaching for decades how the 15-year mortgage is the better option for one simple reason: A 30-year mortgage will cost you way more in the long run.ġ5-Year vs. ![]() Wondering what mortgage to get when buying your house? After you weed out all the junky options, it usually comes down to deciding between a 15-year versus a 30-year mortgage. ![]()
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