Shorten My Loan Term

What is the Benefit?

Reducing the term on your mortgage loan will save homeowners thousands of dollars over the life of the loan. By shortening the loan term, homeowners can benefit from lower interest rates and pay less interest every month.

Term reduction is one of the best ways to save money on your mortgage.

Consider the loan scenarios below. Both loans are for the same loan amount, however, the scenario with the shorter term saves over $382K on interest. We encourage clients to consider the long term carefully (like the bankers do!) and if possible, shorten the term to a 20 or 15 year loan to save on BIG on interest.

Let’s compare these two scenarios:

Scenario 1 - 30 Year Term

Loan Amount: $350,000
Interest rate of 7.5%
Monthly Payment: $2,447.25/month
Over 30 year term, you pay a total of $881,010. In other words, borrowing $350,000 costs $288,423 in interest over 30 years.

Scenario 2 - 15 Year Term

Loan Amount: $350,000
Interest rate of 4.5%
Monthly Payment: $2,767.00/month
Over 15 year term, you pay a total of $131,945 in interest, which saves you $382,950 in interest versus the 30 year loan!