A 30-year fixed spreads repayment over a longer term than a 15-year, reducing the required principal-and-interest payment at the same rate. You gain flexibility, but keeping the loan for the full term means paying more interest.
Flexibility is worth something. Compare the required payment, total interest and cash you need for the rest of your life.
Get my optionsWe weigh the program against your whole picture: credit, income, the property, how long you'll keep the loan, cash to close, points or credits, and mortgage insurance.
For a standard fully amortizing fixed-rate mortgage, scheduled principal and interest stays level. Property taxes, insurance, HOA dues, assessments, and any mortgage-insurance charges can change independently. Escrow changes can therefore change the payment collected by the servicer even when the note rate is fixed.
Paying $732.92 extra toward principal each month from the start shortens this loan's payoff, while preserving the option to return to its required payment. This isolates term, not real-world pricing. Both scenarios: $300,000 loan; $0 prepaid or recurring finance charges, points or mortgage insurance.
Contractual schedule: 6.000% interest rate · 6.000% APR · 30-year fixed · 20% / $75,000.00 down · 360 monthly P&I payments of $1,798.65.
Voluntary extra principal: 6.000% interest rate · 6.000% contractual APR · 15-year payoff · same 20% / $75,000.00 down · 180 monthly payments of $2,531.57.
First payment one month after a single advance; no balloon or assumed prepayment penalty. APR reflects the contractual schedule, not voluntary prepayments. Taxes/insurance/HOA excluded; actual housing obligation higher. Not a quote/approval; rates change daily.
Extra principal reduces the balance, but does not automatically lower the required monthly payment. Ask your servicer how to mark principal-only payments and whether the loan has a prepayment penalty. If offered, a recast recalculates the payment after a lump-sum principal reduction using the existing rate and remaining term; eligibility and fees vary.
The best answer usually comes from comparing two or three real options side by side.
Bigger required payment, faster payoff and less full-term interest than a longer loan at the same rate.
See rate, APR, payment and down-payment exampleA starting rate that can change later. Useful for some plans, risky for others.
Read about California ARM LoansChange your rate or term, and see whether it pays for itself.
Read about RefinanceTell us what you're trying to do. We'll price it with several lenders and show you the trade-offs.
Rates, terms, and eligibility depend on credit profile, income, property, loan program, occupancy, market conditions, and underwriting approval.
