According to online realtor Zillow a 30 year $200,000, 4.5%, fixed rate mortgage on your house will currently set your estimated monthly payments at about $1,020 per month. A 15-year fixed rate $200,000 mortgage would drop to 4.0% with monthly payments of $1,480. Approximately how much would the 15-year fixed rate mortgage save you over the length of both loans?

Question

Karly Villanueva

Mathematics

7 February, 02:18

According to online realtor Zillow a 30 year $200,000, 4.5%, fixed rate mortgage on your house will currently set your estimated monthly payments at about $1,020 per month. A 15-year fixed rate $200,000 mortgage would drop to 4.0% with monthly payments of $1,480. Approximately how much would the 15-year fixed rate mortgage save you over the length of both loans?

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Mackenzie Velez · Answer 1

To determine the amount saved by acquiring the 15-year mortgage instead of the 30-year mortgage, we must calculate the total payments to be made.

In the case of the 30-year mortgage, with a fixed rate of 4.5%, monthly payments of $ 1,020 per month must be made, that is, a total payment of $ 367,200 (1,020 x 12 x 30 = 367,200), with which the difference Regarding the acquired loan of $ 200,000, it will be $ 167,200.

In the case of the 15-year mortgage, with a 4% rate, the monthly payments will be $ 1,480, generating a total final payment of $ 266,400 (1,480 x 12 x 20 = 266,400), so in this case, the difference from The loan will be $ 66,400.

Therefore, between both loans, the 15-year option will save $ 100,800 more than in the case of the 30-year mortgage.