buying a home is a major purchase and many people loan ? cash ? to pay for ?. a mortgage is a loan, usually from a bank, that provides a home buyer with the capital required to become a home owner. in return, the home buyer must pay off the loan with interest. joe has $25,000 in cash, and want to buy a house that is listed for $200,000. joe uses $25,000 as a down payment, leading $175,000 to be paid through a mortgage. he chooses a 25 year mortgage with a fixed interest rate of 6%. this means that joe must make monthly payments of $1,127.53. after making this payment every month for 25 years, joe will own the house. he will pay the original $175,000 plus more than $163,000 in interest over that time, meaning his $200,000 house really costs over $360,000. joe can save money by making extra payments against the loan to get ? faster. for example, if he pays off the loan within 15 years, this will cut the amount of interest he pays by $73,000. mortgages help people purchase a home, but it's important to remember that they also are a type of debt. the faster you pay off your mortgage, the more money you save in interest.
- pay off・・・～を完済する
- down payment・・・手付金