Quicken Loans reports a 30-year fixed rate mortgage at 4.9%, a 20-year mortgage at 4.75% and a and a 15-year mortgage at 4.50%. If you want to finance a $218,000 home, how much interest will you save if you refinance your loan for 15 years compared to 30 years?
To calculate the interest savings when refinancing a loan for 15 years compared to 30 years, you will need to determine the total interest paid on each loan term.
For the 30-year mortgage:
Principal amount (loan amount): $218,000
Interest rate: 4.9%
Loan term: 30 years
To calculate the total interest paid on a 30-year mortgage, you can use the formula:
Total Interest Paid = (Principal amount) x (Annual interest rate) x (Loan term in years)
Total Interest Paid = $218,000 x 0.049 x 30
For the 15-year mortgage:
Principal amount: $218,000
Interest rate: 4.5%
Loan term: 15 years
Total Interest Paid = $218,000 x 0.045 x 15
To calculate the interest savings, subtract the total interest paid on the 15-year mortgage from the total interest paid on the 30-year mortgage:
Interest Savings = Total Interest Paid (30 years) - Total Interest Paid (15 years)
Now you can calculate the interest savings on your own using the given information, and find out how much you can save by refinancing your loan for 15 years compared to 30 years.
This is very similar to the other two questions I have answered for you.
You did not respond to either one, so can I know if you understand this type ?
Surely you don't expect me to just do these for, do you ?