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What extra years on a mortgage cost
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This guide
Lengthening the term lowers the payment and raises cumulative interest. The yearly table is where that cost shows up.
The trade is visible
Move the term from 15 to 30 and watch two figures. The principal-and-interest payment falls. Cumulative interest on the last row rises. The second figure is the price of the smaller payment.
The housing total falls by less than the loan payment falls, because tax, insurance, and HOA stay. If PMI applies, it may also last longer, because the balance reaches 80% of the price later.
Years you will not use
If you will move in seven years, you will not pay the thirtieth year of interest. The offer comparison’s hold period is the right lens for two rates. The full-term cumulative interest is the right lens if you keep the loan to the end.
A longer term still changes the balance you would owe at year seven. The yearly table’s balance column is that number. A 30-year loan leaves more unpaid at year seven than a 15-year loan.
No extra-payment dial on the mortgage
The mortgage form does not ask for an extra principal amount. The schedule is the required payment. To see debts respond to extra money, use the debt calculator, where an extra payment is spread across the minimums.
Do not add a second “mortgage” row in debts if housing is already in the month, or you will count the loan twice.
This explains how WiseCalculator treats the numbers you type. It is not a lender’s offer and it is not advice for your loan.
More in Home
- The month you owe less than you borrowedYou owe less than you borrowed after the first principal payment. The early drop is small because interest takes most of the payment.
- Conventional PMI uses the original priceBoth the 80% request and the 78% automatic end are measured against the home price you typed, not a later value.
- What a mortgage payment actually includesPrincipal and interest are only the loan. The housing number also holds property tax, homeowners insurance, PMI, and HOA.