Should I get a 25-year or 30-year mortgage?

Short answer: 25 years = higher payments, less total interest, own home faster. 30 years = lower payments, more total interest.

What this actually means in plain English

A 30-year mortgage has lower monthly payments but you pay way more interest overall. A 25-year mortgage costs more per month but you own your home faster and pay less total interest. If you can afford the 25-year payments, choose it. You can always switch to 30 years if money gets tight.

Key Facts

Example

Loan Amount: $500,000

Rate: 7.0%

Twenty Five Year Payment: $3,533/month

Thirty Year Payment: $3,327/month

Total Interest25: $559,900

Total Interest30: $697,700

Difference: $137,800 more interest on 30 years

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