For money you have, such as a savings account, interest is the amount you earn when you let someone else use or hold your funds. Bankrate's loan interest calculator can help you determine the total interest over the life of your loan and your average monthly interest payments. This calculator only applies to fixed or simple interest loans. In general, the longer the term of your loan, the more interest you'll pay.
Loans with shorter terms tend to have lower interest costs, but higher monthly payments than loans with longer terms. But a lot depends on the details: the lower the interest costs and how much higher the monthly payments could be depends on the loan terms that are set, as well as the interest rate. Rates vary between lenders, especially for shorter terms. Explore the rates for the different loan terms to find out if you're getting a good deal.
Always compare official loan offers, called Loan Estimates, before making a decision. Explore the rates of the different types of interest rates and see for yourself how the initial interest rate of an ARM compares with the rate of a fixed-rate mortgage. During the first period, your interest rate is fixed and will not change. During the second period, its rate rises and falls regularly depending on market changes.
Learn more about how adjustable rates change. Most ARMs have a 30-year loan term. Most people don't have the money to simply buy a home. Instead, they use a mortgage, which is a loan to buy a home.
After making a down payment of between 3% and 25%, they get a mortgage to cover the remaining costs of buying the home. The type of loan you apply for can influence the mortgage rate offered to you. For example, jumbo loans tend to have higher interest rates.