Let’s say a homeowner has a $500,000 mortgage with a 5% interest rate. If they choose a 25-year amortization rate, their monthly payments would come to $2,922.95. The total interest they would pay over the course of the 25 years would be $376,885.06.
Now, let’s use the same example but say the homeowner chose a 30-year amortization period. Their monthly payment would be lowered to $2,684.11 but, over the course of their mortgage, they would be paying a total of $466,278.92 in interest. That’s an additional $89,393.86 in interest spread over the extra five years.