When you’re shopping for a mortgage, the loan term you choose can dramatically impact both your monthly payment and the total amount you’ll pay over time. At Finance West Lending, we help homeowners understand exactly what they’re getting into with each mortgage option.
Let me walk you through a real-world comparison that shows you the true cost of different mortgage terms.
On average, a mortgage is held about 7 years. We wanted to show you the numbers after that period of time to help you make a better informed decision.
For this analysis, we’re using a common scenario many of our clients face:
Purchase Price: $1,000,000
Down Payment: 25% ($250,000)
Loan Amount: $750,000
Here’s how the three most common fixed-rate mortgage terms stack up:
| Loan Type | Interest Rate | Monthly Payment | Total Interest (Full Term) | Principal Paid (First 7 Years) | Interest Paid (First 7 Years) |
|---|---|---|---|---|---|
| 30-Year Fixed | 6.25% | $4,617.88 | $912,436.44 | $74,748 | $313,153.77 |
| 15-Year Fixed | 5.75% | $6,228.08 | $371,053.62 | $271,654 | $251,503.76 |
| 50-Year Fixed | 6.75% | $4,369.69 | $1,871,816.03 | $16,151 | $350,903.25 |
At first glance, you’ll notice the monthly payment drops as the loan term extends. The 50-year mortgage offers the lowest monthly payment at $4,369.69, while the 15-year requires $6,228.08 per month.
But here’s where it gets interesting—and expensive.
The total interest paid over the full term tells a completely different story. With a 50-year mortgage, you’d pay nearly $1.9 million in interest alone—that’s more than twice the original loan amount!
At Finance West Lending, we know that most homeowners don’t keep their mortgage for the full 30, 15, or 50 years. According to national data, the average homeowner refinances or sells within approximately 7 years.
This means what happens in those first seven years is what really impacts your wallet.
Let’s look at what you actually accomplish in the first seven years with each mortgage type:
30-Year Fixed Mortgage (6.25%)
Interest Paid: $313,153.77
Principal Paid: $73,347.17
Remaining Balance: $676,652.83
15-Year Fixed Mortgage (5.75%)
Interest Paid: $251,503.76
Principal Paid: $271,863.92
Remaining Balance: $478,136.08
50-Year Fixed Mortgage (6.75%)
Interest Paid: $350,903.25
Principal Paid: $15,187.95
Remaining Balance: $734,812.05
Even though the 15-year mortgage has the highest monthly payment, it delivers the lowest interest cost in the first seven years—by a significant margin. You’d save over $60,000 in interest compared to the 30-year option.
Even more striking: with a 15-year mortgage, you’d build $271,863 in equity during those first seven years, compared to just $73,347 with a 30-year loan and a mere $15,188 with a 50-year mortgage.
The 50-year mortgage might look attractive with that low payment, but you’re barely touching the principal. After seven years of payments, you’d still owe 98% of your original loan amount.
At Finance West Lending, we believe the right mortgage depends on your unique financial situation. Here’s how we guide our clients:
You need a balanced approach between payment and cost. You want the flexibility to invest money elsewhere. You’re buying in a competitive market where qualifying is tight. You value having lower required payments with the option to pay extra.
Best for: Most first-time homebuyers and those who want financial flexibility
You want to build home equity as quickly as possible. You have strong, stable cash flow. You’re focused on minimizing total interest costs. You’re planning to stay in the home long-term. You’re closer to retirement and want to be mortgage-free sooner.
Best for: High-income households and those prioritizing wealth building
Monthly payment is your absolute top priority. You’re purchasing in an extremely high-cost market. You have other high-return investment opportunities. You understand and accept the trade-off of paying significantly more interest.
Best for: Buyers in ultra-expensive markets where qualifying is the main barrier
The numbers tell a powerful story, but your personal situation is unique. At Finance West Lending, we take the time to understand your financial goals, timeline, and budget to recommend the mortgage term that truly serves your best interests.
Ready to explore your mortgage options? Contact Finance West Lending today for a personalized mortgage analysis. We’ll show you exactly what each loan option means for your monthly budget and long-term financial health.
Can I pay off a 30-year mortgage early?
Yes! Most mortgages allow you to make extra principal payments without penalty. This gives you the flexibility of a lower required payment while still building equity faster if your budget allows.
How do I qualify for a 15-year mortgage?
15-year mortgages typically require stronger income and debt-to-income ratios since the monthly payment is higher. However, the lower interest rate can sometimes help with qualification.
Are 50-year mortgages widely available?
50-year mortgages are much less common than 15- and 30-year terms and aren’t offered by all lenders. Availability varies by market and lender.
Should I refinance from a 30-year to a 15-year mortgage?
It depends on your current rate, how long you’ve had your mortgage, and your financial goals. We can run a detailed analysis to see if refinancing makes sense for you.
About Finance West Lending: We’re committed to providing transparent mortgage guidance that puts your financial wellness first. Our experienced loan officers help you navigate the complexities of home financing with clarity and confidence.