15- vs 30-Year Mortgage
Choosing your loan term is one of the biggest decisions in a mortgage. It comes down to a trade-off: a lower monthly payment now, or far less interest over time. This guide breaks down the difference with real numbers. To compare both on your own figures, use the free mortgage calculator and switch the term between 30 and 15.
In short: a 30-year loan gives you a lower, more flexible payment. A 15-year loan gives you a much lower total interest cost and faster equity, in exchange for a higher monthly payment.
The core trade-off
Both loans pay off the same amount borrowed. The difference is how quickly. A shorter term means bigger monthly payments, but because you're borrowing the money for half as long, you pay dramatically less interest. A longer term spreads smaller payments over more years, which is easier on your monthly budget but far more expensive in total.
An example: $300,000 at 6.5%
Here's the same $300,000 loan at a 6.5% rate, compared across both terms:
| 30-year | 15-year | |
|---|---|---|
| Monthly payment (P&I) | ~$1,896 | ~$2,613 |
| Total interest paid | ~$383,000 | ~$170,000 |
| Total of payments | ~$683,000 | ~$470,000 |
| Paid off in | 30 years | 15 years |
The 15-year payment is about $717 more per month, but it saves roughly $212,000 in interest and you own the home outright in half the time. In reality the gap is often even wider, because lenders usually offer a lower rate on 15-year loans (see the note below).
Why 15-year loans often have lower rates
A shorter term is less risky for the lender, so 15-year mortgages typically come with a rate about 0.5%–0.75% lower than the equivalent 30-year loan. That lower rate compounds the interest savings, making the 15-year option even more efficient than the same-rate comparison above suggests. When you run your own numbers, try entering a slightly lower rate for the 15-year term to see a realistic picture.
When a 30-year makes sense
- You want the lowest required payment for breathing room in your budget.
- You'd rather invest the monthly difference, or keep cash flexible for other goals.
- You want to qualify for a larger home; the lower payment stretches further under lending limits.
- You can still pay extra when you want to cut interest without being locked into the higher payment.
When a 15-year makes sense
- You can comfortably afford the higher payment and want to minimize total interest.
- You want to build equity quickly or own the home free and clear sooner (e.g. before retirement).
- You value the lower interest rate and the discipline of a fixed, faster payoff.
The middle path: a 30-year with extra payments
Not sure? Many buyers take the 30-year loan for its lower required payment, then voluntarily pay extra toward principal, effectively paying it off like a 15-year loan in good months, but keeping the option to fall back to the smaller payment when needed. The main thing you give up is the lower 15-year interest rate. It's a popular way to get most of the savings with more flexibility.
Try both: open the mortgage calculator, enter your price and down payment, and toggle the term between 30 and 15. Watch the monthly payment and total interest change instantly.
Frequently asked questions
Is a 15-year mortgage better than a 30-year?
Neither is universally better. A 15-year saves huge interest and builds equity fast but has a higher payment; a 30-year is cheaper monthly and more flexible but costs far more overall. It's a trade-off between cash flow and total cost.
How much interest do you save with a 15-year mortgage?
On a $300,000 loan at 6.5%, about $212,000: roughly $170,000 in interest versus $383,000. With the lower rate 15-year loans usually get, the saving is often larger.
Can I just pay extra on a 30-year instead?
Yes. Extra principal payments shorten the term and cut interest, with more flexibility. You just won't get the lower 15-year rate.
More mortgage guides
- What's in a mortgage payment? (PITI, PMI & HOA)
- How much is PMI, and how do I remove it?
- How much house can I afford?
This guide is general information, not financial advice. Rates and figures vary. Confirm all numbers with your lender.
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