How long should you take to pay off your mortgage?

Part 4: Finding the right home loan
Published on Nov 28, 2005

(This is Part 4 of a seven-part series. See Part 1: Mortgage shopping: what you should know before you begin; Part 2: Pros and cons of fixed, adjustable mortgages; Part 3: Three options available on most mortgages; Part 5: Investment returns influence real estate down payment; Part 6: Understanding choices in mortgage insurance and Part 7: Navigating real estate loan locks, docs.) This is the fourth article of a series on the decisions mortgage borrowers should make prior to entering the market. Previous articles were about selecting the best type of mortgage, and selecting among three options: payingpoints, waiving escrows, and accepting a prepayment penalty. This article is about selecting the best term. The term of a mortgage is the period used to calculate the mortgage payment. The longer the term, the lower the mortgage payment but the slower you pay down the balance. A mortgage that is interest-only (IO) for its entire life has the longest term possible--it never pays off. ...