15-Year Mortgages Save In Long Run
Shorter Loans Reduce Interest Rate Charges
Today's low mortgage rates can make refinancing very attractive.
Many people do it to lower their monthly mortgage payment. But you can save significant money in the long run by going for a slightly higher monthly payment and refinancing your 30-year mortgage with a 15-year loan.
According to Ken Glickman, contributing editor of the Bottom Line/Personal Consumer newsletter: A 30-year, $150,000 loan at 8.5 percent gives you a monthly payment of $1,153 dollars. A 15-year loan at 6.79 percent, you'll pay $177 more per month. But over the course of the loan, you'll save almost $176,000 in interest charges.
Also, homebuyers who are able to meet their monthly payments will own their home faster, and could finish paying off their mortgage before their kids go to college. Or they can finish with their payments before they retire.
And 15-year mortgage rates are lower than 30-year rates. Right now, they're averaging about a half-point less, according to the mortgage company Freddie Mac.
But, 15-year mortgages may not be for everyone. Some people may need to start with a 30-year mortgage.
If you begin with a 30-year loan, you could pay extra principal so that you are making enough of a payment to pay off the mortgage in 15 years, according to online mortgage service Mortgage-X.com. If you pay more some months, you still benefit and you have the flexibility of not having to make a large payment each month.
Thirty-year and 15-year mortgages increased Monday, according to a report by MSNBC.com. Fifteen-year mortgage rates increased to 6.13 percent from 6.09 percent; the 30-year mortgage rose to 6.64 percent, up from 6.61 percent last week.
But this free downloadable program makes it simple. Enter the term of the loan, interest rate, frequency and other factors, and this calculator automatically "amortizes" for you -- breaks it down into a payment schedule.
It works for home mortgages, car loans, home equity loans and more. Plus, it's printable. It's 130K in size.
The mortgage calculator program was made by Datagroup Inc. of Greensboro, N.C. Read more about the program here. To download the program, click here.
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Mortgage Calculator Shows What You'd Pay
Shopping for a low interest rate is challenging enough. Figuring out what you'd actually pay per month can be very complicated.But this free downloadable program makes it simple. Enter the term of the loan, interest rate, frequency and other factors, and this calculator automatically "amortizes" for you -- breaks it down into a payment schedule.
It works for home mortgages, car loans, home equity loans and more. Plus, it's printable. It's 130K in size.
The mortgage calculator program was made by Datagroup Inc. of Greensboro, N.C. Read more about the program here. To download the program, click here.
- August 24, 2001: Wiping Out the Mortgage
- May 15, 2001: How Do You Know When It's Time To Refinance Your Mortgage?
- April 26, 2001: Shave Years Off Your Mortgage
- January 17, 2001: Should I Pay to Prepay My Mortgage?
- August 30, 2000: Where's The Best Interest Rate Info?
- May 9, 2000: How 'Net Reduces Mortgage Discrimination
- February 15, 2000: 'Piggyback' On Your Own Mortgage
- August 9, 1999: Some Homeowners Can Avoid A Hidden Insurance Cost
Copyright 2001 by Lifewhile.com. The Associated Press contributed to this report. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
