30-year mortgage
A mortgage paid off over 30 years. Payments are lower than shorter loans but total interest is much higher. The default choice for most U.S. buyers.
Every term like this one lights up in the step you're on.
Free to set up. No credit card.Part 1 of 4
Why a seller cares
Most buyers use one, and most sellers are paying one off. Its slow early amortization is why a seller a few years in still owes nearly the whole loan, and why the payoff surprises people.
Part 2 of 4
A simple example
A $240,000 30-year loan at 6.5%. After five years the balance is still about $224,000, though the buyer has paid about $91,000.
| After five years | Where the money went |
|---|---|
| Payments made | About $91,000 |
| Principal paid | About $16,000 |
| Interest paid | About $75,000 |
Thirty years keeps the payment low by front-loading the interest.
Part 3 of 4
What people get wrong
That a low payment means the loan is cheap. It means the loan is long, and long is expensive.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
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In your room, this word explains itself where it appears.
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