 TITLE: How Much House Can I Afford? CONTENT: Consider the Mortgage Term\n--------------------------\nThe interest rate that applies to your mortgage is the single biggest determinant of what your loan will cost you over time, but the amount of time you'll be making payments is a huge factor as well.\nU.S. mortgages loans typically carry repayment periods of 15 years or 30 years, although longer and shorter repayment periods are available. Shorter loan periods typically come with lower interest rates, and because those rates are applied for a much shorter length of time, their costs over the life of the loan are considerably lower than on longer loans. The main advantage to longer-term loans is that stretching repayment over a longer time frame means lower monthly payments.\nTo illustrate the significance of repayment terms alone, holding other factors equal, consider the differences in monthly payment amount and total cost (principal and interest) between 15-year and 30-year mortgages on an average U.S. home priced at $226,800. For comparison purposes, we'll assume the interest rate on both loans is 4.5%, and that you made a down payment of 20% ($45,360), so PMI isn't a consideration: END