15-Year vs. 30-Year Mortgage Calculator
This calculator helps you compare the total costs of a 15-year mortgage versus a 30-year mortgage. It's designed for potential homeowners looking to understand the financial implications of different mortgage terms.
Calculator
Results
15-Year Total Payment
$0.00
30-Year Total Payment
$0.00
Data Source and Methodology
All calculations are based on standard mortgage amortization formulas. For more details, please visit Reddit - Personal Finance. All calculations are strictly based on the formulas and data provided by this source.
The Formula Explained
Monthly Payment = (P × r) / (1 - (1 + r)^-n)
Where P is the loan amount, r is the monthly interest rate, and n is the number of payments.
Glossary of Terms
- Loan Amount: The total amount borrowed.
- Interest Rate: The annual interest rate applied to the loan.
- Total Payment: The total amount paid over the life of the loan.
How It Works: A Step-by-Step Example
Suppose you borrow $200,000 at a 3.5% interest rate. The calculator will compute the total payments for both 15-year and 30-year terms using the amortization formula.
Frequently Asked Questions (FAQ)
- What is a mortgage? A mortgage is a loan used to purchase a home, where the property acts as collateral.
- What is the difference between a 15-year and a 30-year mortgage? A 15-year mortgage typically has higher monthly payments but lower total interest costs than a 30-year mortgage.
- Can I pay off my mortgage early? Yes, most lenders allow early payment, but check for any prepayment penalties.
- How is interest calculated on mortgages? Interest is typically calculated monthly on the remaining balance of the loan.
- Do I need a mortgage broker? A broker can help find better loan terms, but it's not required.