Mortgage Term Comparison Calculator

Term length is the decision with the largest effect on total cost, and it is usually made by default rather than deliberately. A longer term lowers the payment and raises the total interest sharply, because a large balance stays outstanding for far longer.

Seeing three terms side by side makes the trade explicit: a specific monthly figure against a specific lifetime saving, so you can decide what the flexibility is worth rather than accepting whatever the lender defaults to.

The comparison

The same amount and rate are run through the standard payment formula at three different terms. Total interest at each is the payment multiplied by the number of months, less the amount borrowed.

Worked example

Borrowing 300,000 at 6.5%: fifteen years costs 2,613 a month and 170,400 of interest; twenty-five years costs 2,026 and 307,700; thirty years costs 1,896 and 382,600. Choosing fifteen years over thirty costs 717 more each month and saves about 212,200 in interest.

A middle path that keeps the flexibility

Taking the longer term and overpaying voluntarily gives nearly the same interest saving while leaving you free to stop overpaying in a difficult month. The committed shorter term is cheaper only if you would otherwise not have made the overpayments.

Frequently asked questions