Question

Assume that Jocelyn is comparing two fixed-rate loan options, a 15 year and a 30 year mortgage. Both options have the same interest rate and amount borrowed. The 30 year, when compared to the 15 year loan will have a 1)_____________ monthly payment and a 2)___________ total cost when repayment is completed.

Answer 1

The 30 year, when compared to the 15 year loan will have a 1) LOWER monthly payment and a 2) HIGHER total cost when repayment is completed.

Answer 2

Assume that Jocelyn is comparing two fixed-rate loan options, a 15 year and a 30-year mortgage. Both options have the same interest rate and amount borrowed. The 30 year, when compared to the 15-year loan will have a Lower Monthly payment monthly payment and a Higher total cost total cost when repayment is completed.


Usually, the plans with Lower Monthly payment are for a long period of time when returning the amount, you pay apparently a small amount every month but at the end when you calculate it its a huge amount because the total amount to pay will be divided through a long time, that is an additional 15 years.