Suppose you are considering buying a house with a market price of $225,000. You plan on making a down payment of 15% and financing the remainder using a 30 year mortgage with a fixed interest rate of 6.25%.

What would the monthly payment be?

Your friend suggests you might want to consider a 15 year loan. Assuming interest rates on 15 year loans are only 5.0 %, What would your monthly payment be if you chose the 15 year loan instead?