How does loan term length affect the total interest paid?

The longer your loan term, the lower your monthly payment — but the more total interest you pay over the life of the loan. On a $300,000 mortgage at 7%, a 30-year loan costs about $418,000 in total interest, while a 15-year loan costs roughly $185,000 — saving over $233,000. However, the 15-year monthly payment is significantly higher. A useful strategy is to take the 30-year loan for lower required payments but make extra principal payments when cash flow allows. This reduces the payoff timeline and total interest without locking you into a higher mandatory monthly payment.