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Mortgage Terms: 15, 20 or 30 years

You will probably want to shoot for the shortest term that is comfortable (and for which you will qualify). The interest savings are enormous as the term decreases. Always make a comparison between a 15 year term payment and a 30 year term payment. The difference is often surprisingly smaller than anticipated. The savings over the term of the loan, however, can be substantial. For example, comparing a 15 year term to a 30 year term, $100,000 mortgage at an 8 1/2% fixed rate yields the following results.

 
 

15 Year

30 Year

Principal and Interest Payment (per month)

$985

$769

Total paid over term in P&I

$177,300

$276,840

Total interest over term

$77,300

$176,840

 

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