Let's do the numbers: Comparing interest rates
Julie Garton-Good, GRI, DREI

If you're wondering whether to refinance back intoanother thirty-year loan or try to bite the bullet with a largerpayment on a fifteen-year loan, here's some information to helpyou decide.

The following table illustrates a $100,000 mortgageat 8.5% interest as paid to maturity under five different loanterms. Although the payment difference between the 30 and 15-yearloans is $216, the interest saved over the term of the loan is$99,556!

The answer? If you can swing the payment differentialbetween the two loans, you'll not only be saving a tremendousamount of interest, but be building equity at a quicker pace aswell!

Months
Loan term
Monthly Payment
Loan term
Total Cost
Total Interest Paid
30 years
$ 769
360
$276,809
$176,809
20 years
$ 868
240
$208,278
$108,278
15 years
$ 985
180
$177,253
$ 77,253
10 years
$1,240
120
$148,783
$ 48,783

The difference in the repayment amounts is staggering!Make sure you discuss these options with your lender before yousign on the dotted line.

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