Compare this with a 30-year fixed-rate mortgage at 4.5% — remember, the interest rates are higher for longer terms.
You’ll pay $1,013 each month and a whopping $164,813 in interest over the life of the loan. This doesn’t take into account closing costs like property and transfer taxes, maintenance fees and mortgage insurance. For many borrowers, the amount they save in interest is worth the higher monthly payments — and they get to own their home a full decade earlier.
This is sample data. Your rate will depend on your down payment, as well as your credit score and income. Since the monthly payments are higher than a standard mortgage, it’s harder to qualify for a 20-year mortgage.