Question

How much interest (to the nearest dollar) would be saved on the following loan if the home were financed for 15 rather than 30 years?

A $519,000 home bought with a 20% down payment and the balance financed for 30 years at 4.1%

Answer 1

Cost of the home = $ 519,000

Down payment = 20%

PV of loan amount (PV) = (519,000 - 20% * 519,000) = $ 415,200

Number of years (nper) = 30* 12

Rate = 4.1%/12

Total interest payment for the period ( 30 years) =

= $ 307,046.27

Total interest payment for 15 years = = $ 141,365.83

Interest saved on the home loan = $ 307,046.27 - $ 141,365.83 = $ 165,680.44