Holding a mortgage for seven years

A seven-year hold counts interest for 84 months plus upfront fees. Interest after that is left out.

Why seven years shows up

The labeled example on a first visit compares two offers over seven years. Seven years is a concrete hold, not a prediction that you will move. You can set a different hold when you compare your own offers.

Eighty-four months of interest, added to each offer’s fee, is the cost. The offer with the lower sum is the cheaper one for that hold.

The balance is not the cost

After seven years you still owe a large balance on a 30-year loan. That remaining balance is not added to the cost. You would pay it off by selling, refinancing, or continuing the loan. The comparison prices the financing cost of the years you stay, not the payoff check.

If you care about the balance you would still owe, read the yearly table around year seven. That balance is principal left, which is your money in the house only if the house is worth at least that much.

Change the hold when your plan is different

A two-year hold makes fees dominate. A twenty-year hold makes the note rate dominate. The break-even month tells you when the lower rate has covered its higher fees, if it ever does.

Taxes and insurance over those seven years are real spending, and they are the same for both offers, so they do not change which lender wins.

This explains how WiseCalculator treats the numbers you type. It is not a lender’s offer and it is not advice for your loan.