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, correct? Not necessarily. Taking out 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 every month. If you are unsure about which type of mortgage you should choose, take a look below to consider 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 will pay less interest overall. With a 30-year mortgage, the opposite is usually true. You will end up paying more for your house due to the higher amount of 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 terms and interest rates can have a big impact on your monthly payments and the amount you will 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
||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.
||The time frame when a loan line of credit must be repaid. The most common mortgage terms are 15 years and 30 years.
||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 principal and interest payment.
||Total of all monthly payments over the full term of the mortgage.
||Total of all interest paid over the full term of the mortgage.