Recently I completed a project for my computing course where I compared two mortgages with the same balance and APR but with different lengths. Thrilling; I have goosebumps just thinking about it.
For my balance, I used $199,999 and charged a 6.9% APR. Starting on April 5, 2063 (the year of the first warp-powered flight in Star Trek), one mortgage lasted only 15 years, whilst the later was 30 years.
You can look at it here.
Upon finishing, I came to several conclusions, one being that the proletariat must swarm across the land, for interest is the bourgeois’ greatest mischief. Secondly, their isn’t that large of a difference between the payments for a 15 v. 30 year loan. For only $469.29 more a month, you could pay for your loan twice as quickly.
On the other hand, $469.29 could be the difference between eating each month. Even though more aggressive payment program may save money in the long run, it may not be a feasible option for some people.
In the 15 year loan, the total interest paid would be $121,568.24. In the 30 year, $273,040.73. Yikes. Obviously the 15 year is the better option, but both are a frighteningly large amount of money. In the 30 year, it surpasses the value of the principle balance. Kind of makes you want to roll out the ol’ guillotine.
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