 TITLE: Should You Get a 15- or 30-Year Mortgage? CONTENT: How Does Your Mortgage Term Impact Cost?\n----------------------------------------\nWhen you pay back a mortgage, your monthly loan payment is split between paying down the principal balance (the amount you borrowed to cover the home purchase) and paying interest. As you pay off your loan, your interest payments are recalculated based on the remaining balance, and over time, less of your monthly payment will go toward interest and more toward principal. This concept is called amortization. Depending on your mortgage term, the amount of each monthly payment that goes toward either the interest or the principal balance can be altered.\nThe length of your mortgage term can affect costs in several ways, but one of the biggest factors is how it can influence your interest rates. The current national average rates stand at around 2.64% for a 15-year mortgage and 3.34% for the 30-year option. The rates for your specific mortgage will vary based on factors like your home's price, your credit score and income.\nAs a result, a 15-year mortgage costs less in the long term, but a 30-year term requires lower monthly payments. The 15-year mortgage's principal will be paid down faster with the shorter timeline and higher monthly payments.\nSuppose you're approved for a $500,000 mortgage with a 10% down payment. For simplicity's sake, let's say the interest rate is 3.5% for the 15-year loan and 4% for the 30-year term (not including closing costs and other fees since these are often paid upfront and not included in the loan amount).\nIn this example:\n*   **Over 15 years**, you'd make a monthly mortgage payment of $3,525, and you would pay about $634,000 by the end of your loan term.\n*   **Over 30 years**, your monthly payment would be $2,456, and you would pay about $884,000 over the life of the loan.\nCheck out our mortgage calculator to crunch the numbers for your own situation:\nMortgage Calculator\n-------------------\n†The information provided is for educational purposes only and should not be construed as financial advice. Experian cannot guarantee the accuracy of the results provided. Your lender may charge other fees which have not been factored in this calculation. These results, based on the information provided by you, represent an estimate and you should consult your own financial advisor regarding your particular needs. END