Save Big With A Shorter Term Loan

shorter-term-loans

Loans with earlier payoffs, such as a 15 or 20 year loan, can often result in lower interest rates because they carry less risk for lenders.

The chart above illustrates the interest rate savings on a mortgage with a current loan balance of $250,000. While mortgage payments increase slightly as the term shortens, the savings on interest grows dramatically.

Switching from a 30 year to a 15 year fixed rate mortgage increases your monthly payment by $593, but saves you close to $96,000 in interest savings!

Source: Lending Tree LLC

 

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