Both families finance $160,000. The mortgage payment on the Smith’s 4.93% loan is $852.08 per month. The Joneses’ Fannie Mae loan carries a lower interest rate, so their monthly payment is nearly $100 a month less. In the first year alone, the Joneses save $1,597.47 because of the Fannie Mae guarantee.

  Smiths Joneses
Finance amount $160,000 $160,000
Interest rate 4.93% 3.93%
Monthly payment $852.08 $757.42
Year 1 savings N/A $1,597.47