Understanding your $400,000 mortgage at 6.5%
On a $400,000 loan at a fixed 6.5% annual interest rate, your monthly principal and interest payment works out to $2,528.27 on a 30-year term. Over the life of the loan you will pay a total of $910,178 — meaning $510,178 goes to interest, which is 127.5% of the original loan.
Choosing a 15-year mortgage raises the monthly payment to $3,484.43 — an increase of $956.16 per month — but dramatically cuts the interest bill. You save $282,981 in total interest compared to the 30-year option, and you own your home outright 15 years sooner.
These figures cover principal and interest only. Your actual monthly payment will also include property taxes, homeowners insurance, and potentially private mortgage insurance (PMI) if your down payment is less than 20%. Use the full mortgage calculator to include these items and build a complete picture of your monthly housing cost.
The standard advice is to choose the 30-year term if cash flow flexibility matters — you can always make extra principal payments — and the 15-year term if you can comfortably afford the higher payment and want to minimize total interest paid.