Most people don't realize about the existence of this middle of the road alternative when shopping for a home loan. The 20 year mortgage combines the best attributes of both the 30 year mortgage and 15 year mortgage. For starters, the monthly payments of a 20 year mortgage are more affordable than a 15 year option. As an example, with a $300,000 balance at an interest rate of 5 percent, a 30 year mortgage payment would be $1,610 per month, a 20 year mortgage payment would be $1,980 per month, and a 15 year payment would be $2,372 per month. This makes the 20 year mortgage $392 cheaper than a 15 year mortgage and only $370 more expensive than a 30 year mortgage.