The Johnsons are buying a house that costs $210,000 and can afford a 20% down payment. If the Johnsons want the lowest monthly payment, which loan option would you recommend?

The 30-year fixed loan with 20% down (choice B) has a loan amount of $168,000: $210,000 − $42,000. Its monthly principal-and-interest payment at 6% is about $1,007. The other 30-year loans have either a larger loan balance or a higher interest rate, and the 15-year loan requires payments over a much shorter period, so each has a higher monthly payment. Thus, choice B is the best recommendation for the lowest monthly payment.

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