How does my amortization affect the amount of interest I pay?

The amortization period has a dramatic effect on the amount of interest paid over the length of the mortgage. Consider the example of a $150,000 mortgage with an interest rate of 6.20%*

• With a 25 year amortization the monthly payments are $977.61
• With a 20 year amortization the monthly payments are only increased by $107.57 to $1085.18. The savings in interest would be $32,843.40
• With a 15 year amortization the monthly payments are increased by only $298.03 to $1,275.64. The savings in interest would be $63,669.38

* The example assumes the interest rate will remain constant through the whole amortization period.