A 20-year mortgage rate is attractive to borrowers who are looking for an unchanging mortgage payment for a specific period of time. A 20-year fixed-rate mortgage will generally have a lower interest rate than a 30- or 40-year mortgage. You could spend less money on interest over the life of a 20-year mortgage loan as well.
| 20-year mortgage | 30-year mortgage | |
|---|---|---|
| Loan balance | $213,000 | $213,000 |
| Interest rate | 4% | 4.5% |
| Loan term (months) | 240 | 360 |
| Loan payment | $1,291 | $1,079 |
| Total interest expense | $96,777 | $175,526 |