20 Year Mortgage
With a 20 year fixed rate mortgage, you will pay off the 10 years earlier than for a traditional 30 year fixed-rate mortgage and save interest over the life of your loan. As with all fixed-rate mortgages, the interest on your loan never changes, bringing you peace of mind that your principal and interest payments will remain level over time. However, higher monthly mortgage payments may make the 20 year fixed-rate mortgage more difficult to qualify for compared to the 30 year fixed-rate mortgage.
20 Year Mortgage Features
- A 20-year mortgage offers a lower interest rate than a 30 year mortgage. This saves you a significant amount of interest over the life of the loan. For example, with a $100,000 loan at 6.00 percent interest, the 20 year mortgage will save you $43,800 in interest payments over the life of your loan, compared to the same mortgage amount for a 30 year term. However, monthly mortgage payments will be higher.
- The shorter-term allows you to own your home outright sooner.