“Rate isn’t everything. The difference in monthly payments on a $400,000 mortgage with a an interest rate of 3.4% vs. 3.5% is only $21.”
Some lenders will offer a low rate, but that low rate may come without many important mortgage features. These features can save you a lot more money thena few percentage points of interest and they are great ways to put dollars back in your pocket.
This comparison table below will show how using various mortgage features will save you a lot more money than rate. The chart is based on a 25 year fixed-rate mortgage, with monthly payments, an interest rate of 3.5% and a principal (amount borrowed) of $400,000.
Check out our mortgage calculator to do find out what money saving features may be best for you
| Mortgage Feature | Description | Option | Interest savings over 25 year term |
| Rate | Rate is 3.4% vs 3.5% | Fixed rate mortgage | $6,316 |
| Amortization period | The number of years you will take to pay off your entire mortgage. The more years you choose to pay off your mortgage will increase your total interest payments. | Paying off over 25 years vs. 30 years. | 45,472 |
| Payment schedule | The schedule at which you choose to pay off your mortgage. This can be monthly, semi-monthly, weekly, bi-weekly, accelerated weekly, and accelerated bi-weekly | Use accelerated bi-weekly to pay off your mortgage more quickly than a standard monthly or bi-weekly payment. | $25,083 |
| Yearly payment increases (Lump Sum Payments) | The amount your lender will allow you to pay as a lump sum yearly. Some lenders allow up to 20%, while others allow up to 15%. Some lenders do not allow any pre-payments. This lump sum goes directly to paying off your mortgage principal | A $1,000 lump sum payment made yearly. | $11,975 |
| Prepayment | Certain lenders will allow you to pay more money in addition to your scheduled payments. This will enable you to pay off your principal more quickly and lower the amount paid in interest. | If you increase your monthly payments by $50 | $7,724 |
