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  Mortgage Terms Comparison

Choosing a mortgage is an integral part of the home buying process. Opting for a shorter mortgage term instead of the traditional 30-year term seems like a smart move, right? Not necessarily. Going with a shorter mortgage term does have some interest-saving benefits. However, if your income is too low for a shorter term, a 30-year mortgage will be cheaper on a monthly basis. If you're on the fence about which type of mortgage you should choose, take a look below to figure out which one is right for you. The main difference between the short term and 30-year term is how payments and interest add up. With a short term mortgage, your monthly payments are higher but you'll pay less in interest overall. With a 30-year mortgage, the opposite is usually true. You'll end up paying more for your house due to the interest. But your mortgage payments will typically be smaller.

This calculator will help you to compare monthly payments and interest costs of home mortgages at various loan term lengths. Enter the details of your loan to find the monthly and total cost of each option. Differences in loan term and interest rate can have a big impact on your monthly payments and the amount you'll pay over the life of each loan. Generally, the interest portion of your monthly mortgage payment is tax deductible. Consider how much you can save on taxes.

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  Related Mortgage Terms
Principal The amount borrowed or the remaining unpaid balance of a loan excluding unpaid accrued interest; also refers to the portion of the monthly payment that reduces the outstanding balance of a loan.
Term The time frame when a loan line of credit must be repaid. The most common mortgage terms are 15 years and 30 years.
Interest rate The cost a customer pays to a lender for borrowing funds over a period of time expressed as a percentage rate of the loan amount.
Marginal tax rate The marginal tax rate is the percentage of tax applied to your income for each tax bracket in which you qualify. In essence, the marginal tax rate is the percentage taken from your next dollar of taxable income above a pre-defined income threshold.
Monthly Monthly principal and interest payment.
Total Total of all monthly payments over the full term of the mortgage.
Interest Total of all interest paid over the full term of the mortgage.