April 2, 2008___ Do you really save having a 25 year versus a 40 year amortized mortgage?

This mornings paper had an article on the advantages of 40 year amortized mortgage versus a 25 year amortized mortgage.

Based on a 5% mortgage rate, a $100,000 mortgage, and a 25 year amortization period the payment is about $585 per month but on a 40 year amortization the monthly payment is $483.

The saving is $102 per month or about $3.40 per day, the price of a Latte from your designer coffee shop.

Based on the 25 year $100,000 mortgage the interest cost is $75,300, for the 40 year mortgage the interest cost is $130,600. So save $55,300 by watching your Looney spending habits.

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