Should I take a 15 or 30 year mortgage? Fifteen year loans generally carry a lower interest rate than 30 year mortgages. They let you build equity faster (the portion of your home that you own without debt), and they also lower the amount of interest paid over the loan term. The following table compares a $100,000 loan over 15 years and 30 years, assuming that a 20% downpayment has been made. Payments shown are for principal and interest only. Taxes and insurance will be additional.

30-Year Fixed 15-Year Fixed
Loan Amount $100,000 $100,000
3 Points Paid $3,000 $3,000
Interest Rate 7.0% 6.625%
APR 7.5% $7.125%
Monthly Payments $665.30 $877.99
Number of Payments 360 180
Total Paid $239,508.00 $158,038.20
Savings with 15-Year: $81,469.80

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