The benefit to the 20 year fixed-rate over the 30 year is that not only do you become debt free 10 years sooner but the interest rate is often much lower. This mortgage amortizes principal and interest over 20 years & may save a considerable amount of total interest in the long run but the monthly payments will overall be much higher than the 30-year fixed-rate.
Please click here to visit our section of mortgage calculators that will let you know where you stand and what you kind of payment you can expect with a 20 year fixed rate mortgage.
There are advantages of financing your home on a 20 year fixed rate mortgage. The 20 year fixed rate mortgage you will pay off you mortgage 10 years sooner and in the process you will save thousands of dollars in interest over the life of the loan. It often offers a lower interest rate compared to a 30-year loan. Another advantage is with a fixed rate mortgage, your interest rate will remain the same throughout the loan so there are no interest rate change surprises.
There are some disadvantages of financing your home on a 20 year fixed rate mortgage. Compared to the 30 year fixed rate mortgage your payment will be higher because you are financing it for less years. Compared to the 15 year fixed rate mortgage you will still be paying quite a bit more interest than with a 15 year fixed rate mortgage.
Be sure to visit our "Which Loan Is Right For Me?" section for a list of loan terms and the pros and cons of each one.
