Buying A House? How To Save A Small Fortune

No Comments » | Posted by Jacob ONeill
Aug 07 2010

Over the life of the mortgage loan, of course.

A traditional 30-year mortgage of $200,000.00 and an interest rate of 4.75%, the principal and interest payment would be $1043.00 per month and you would end up paying $175,600.00 in interest over the life of the loan.

Contrast that with a 20-year mortgage, with a 4.5% interest rate (you can typically get a lower interest rate with a shorter term) the monthly principal and interest payment would be $1265.00 and you would end up paying $103,670.00 in interest over the life of the loan.

Saving you about $71,930.00 in interest. Not bad.

So if you can do it, it would be worth it for you to get a 20-year note over the long run.

P.S. Most mortgage brokers will probably not suggest a 20-year note for you so you may have to approach the subject on your own.

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