A homeowner could take out a 15-year mortgage at a 5.5 percent annual rate on a $195,000 mortgage amount,or she could finance the purchase with a 30-year mortgage at a 6.1 percent annual rate. How much total interest over the entire mortgage period could she save by financing her home with the 15-year mortgage (to the nearest dollar)?

Question

Quizplus · Accepted Answer

The total interest paid on a 15-year mortgage at 5.5% is less than that on a 30-year mortgage at 6.1%. Calculating the total interest for both options and finding the difference gives a savings of approximately $138,612 with the 15-year mortgage.

A Homeowner Could Take Out a 15-Year Mortgage at a 5.5