15-Year vs 30-Year — Payment vs Total Cost
Compare monthly payment and total interest. 15-year saves interest but has higher payment.
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15yr often 0.25-0.5% lower rate 30yr: invest the difference Extra payments on 30yr 40-50% interest savings with 15yr
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Why: 15-year builds equity faster and saves interest. 30-year offers flexibility and lower payment.
How: Standard amortization formula. Compare total interest and monthly payment for each term.
Run the calculator when you are ready.
Mortgage Term Comparison Calculator
15-year vs 30-year • Payment vs total cost
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Calculation Breakdown
15-Year Mortgage
30-Year Mortgage
Comparison
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Get personalized advice on which term is right for you.
1. Key Takeaways
- • 15-year saves interest, higher payment
- • 30-year offers flexibility
- • Can pay extra on 30-year
- • Depends on your situation
2. 15-Year vs 30-Year: The Trade-Off
15-Year Pros
- • Much less total interest
- • Build equity faster
- • Usually lower interest rate
- • Own your home sooner
30-Year Pros
- • Lower monthly payment
- • More cash flow flexibility
- • Can invest the difference
- • Easier to qualify
3. Which Term Is Right For You?
Choose 15-Year If:
- • You can afford the higher payment
- • Approaching retirement
- • Want to minimize interest
- • Have stable, high income
Choose 30-Year If:
- • Need lower monthly payment
- • Want to invest the difference
- • Income is variable
- • Want maximum flexibility
4. Example: $400K Loan Comparison
| Term | Rate | Payment | Total Interest | Total Paid |
|---|---|---|---|---|
| 15-Year | 6.0% | $3,375 | $207,500 | $607,500 |
| 20-Year | 6.25% | $2,922 | $301,280 | $701,280 |
| 30-Year | 6.5% | $2,528 | $510,080 | $910,080 |
15-year saves $302,580 in interest vs 30-year, but costs $847 more per month.
5. Frequently Asked Questions
Why is the 15-year rate lower?
Shorter term = less risk for the lender. They offer a lower rate as incentive for faster payoff.
Can I pay extra on a 30-year loan?
Yes! Many people take 30-year for flexibility, then make extra payments. This gives you options if finances get tight.
Should I invest the payment difference instead?
Depends on investment returns vs mortgage rate. If you can earn more investing than your mortgage costs, investing may win. But mortgages are guaranteed savings.
6. Decision Tips
Budget Test
Can you comfortably afford the 15-year payment? If it's a stretch, go 30-year.
Emergency Fund
If 15-year leaves you without emergency savings, stick with 30-year.
Retirement Timeline
Want mortgage-free before retirement? Count backwards from your target date.
Hybrid Approach
Take 30-year for safety, pay as if it's 20 or 25. You get flexibility and faster payoff.
7. Quick Stats
~0.5%
15yr rate discount
$300K
interest saved (15 vs 30)
8. Sources
CFPB; lender rate sheets.
9. Disclaimer
Estimates only. Get quotes from lenders.
For educational and informational purposes only. Verify with a qualified professional.
💡 Money Facts
yr terms
— Typical
Interest saved
— 15yr
Rate diff
— 15yr lower
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