What is a 20-Year Mortgage?
A 20-year fixed-rate mortgage keeps your interest rate the same for the entire term, but pays off the loan faster than a 30-year. That typically means a higher monthly payment than a 30-year— but noticeably lower total interest over time.
How does it compare to a 30-year loan?
The 20-year loan usually carries a slightly lower interest rate and a much shorter payoff timeline. You’ll trade a higher monthly payment for significant savings in total interest and faster equity build-up.
Pros and cons
- Pros: lower lifetime interest, faster payoff, faster equity.
- Cons: higher monthly payment vs 30-year; less cash-flow flexibility.
How to Use the Calculator
Enter your home price and down payment to compute the loan amount, then set your interest rate and confirm the term is 20 years. Optionally add annual property taxes, homeowners insurance, PMI if your down payment is <20%, and any monthly HOA dues.
Understanding Your Results
The summary shows your total monthly payment and a breakdown across principal, interest, taxes, insurance, PMI, and HOA. You’ll also see total interest over the life of the loan and your payoff date.
Amortization Schedule
The amortization table shows how each payment splits between principal and interest, and how your balance declines over time. Early payments are mostly interest; later payments increasingly go to principal.
20-Year vs 30-Year
Use the comparison card above to see how a 20-year payment differs from a 30-year. In most scenarios, the 20-year has a higher monthly payment but saves tens of thousands in interest.
Frequently Asked Questions
What is PMI?
PMI (Private Mortgage Insurance) is typically required when your down payment is under 20%. It protects the lender and is removed when your LTV drops below the lender’s threshold.
How does my interest rate affect my payment?
Higher rates increase monthly cost and total interest. Small rate changes can make a big impact over 20 years.
Can I pay off early?
Yes—extra principal payments reduce interest and shorten the term. Check your lender’s prepayment policy first.