The discussion, I have chosen the house located in Bedford, NH. It’s a 4 bedroom
3 bath 3,700 square feet in 2.36 acres. It is listed at $1,000,000 (Zillow, 2022).
With a 20% down payment of which is $200,000, the total loan comes to
$800,000.
By starting with a 30 year mortgage with today’s interest rate at 6.94% (Stauffer,
2022).
For 30 year mortgage: total cost of mortgage is $1,904,479.20 with the total
interests paid is $1,104,479.20
Here in this case total interest paid more than half of total cost of mortgage.
Changing the interest rates:
By decreasing the interest rates to 2.65% (Miller, 2022), total cost of mortgage
comes to $1,160,535.60 and the total interest paid is $360,535.60
Which is way less than the previous scenario.
Changing the down payment with 30 year mortgage:
With a 40% down payment which is $400,000, the total loan comes to $600,000.
With a 30 year mortgage with an interest rate of 6.94% (Stauffer, 2022), total cost
of mortgage is
$1,428,361.20 and the total interest is $828,361.20.
Changing the down payment with 15 year mortgage:
With a 40% down payment, and 15 year mortgage with interest rate of 6.94%
(Stauffer, 2022),
The total cost of mortgage is $967,114.80 and the interest paid is $367,114.80.
Of all the variations, 15-year mortgage with the low interest rate would be
beneficial.
With a 15 year mortgage one can own home much faster and pay less interest
(“15-Year mortgage: Pros and cons,” 2017).
References
The 15-Year mortgage: Pros and cons. (2017, November 1). NerdWallet.
https://www.nerdwallet.com/article/mortgages/pros-cons-15-year-
mortgage
Miller, P. (2022, October 27). Mortgage rates chart | Historical and current
rate trends. Mortgage Rates, Mortgage News and Strategy : The
Mortgage Reports. https://themortgagereports.com/61853/30-year-
mortgage-rates-chart
Stauffer, J. (2022, November 16). Today's national mortgage rates, November
16, 2022 | Rates stay just below 7% | NextAdvisor with TIME.
NextAdvisor with TIME. https://time.com/nextadvisor/mortgages/daily-
rates/mortgage-rates-today-november-16-2022/
Zillow. (2022). 3 Williamsburg Ln, Bedford, NH 03110 | MLS #4926594 |
Zillow. https://www.zillow.com/homedetails/3-Williamsburg-Ln-
Bedford-NH-03110/74270420_zpid/
