15 vs 30 Year Mortgage
The shorter term saves an enormous amount. It also demands a much bigger payment for fifteen years, with no way to shrink it if things go wrong. This shows both numbers, because the decision is really about which payment you could survive in a bad year.
The 15-year saves you
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- 15-year payment
- $0
- 30-year payment
- $0
- Extra each month
- $0
- Interest on the 15-year
- $0
- Interest on the 30-year
- $0
What each term costs in interest
The taller bar costs more over the whole period. Cheaper is not automatically right, but choosing the dearer one should be deliberate.
Move it and watch
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at {v} for how much you are borrowing
And what you can change
Why your own figure may differ
Every term in between
It is not only a choice of two. Lenders often offer 20 and 25 year terms, which sit between the payment you can manage and the saving you want.
| Term | Monthly payment | Total interest | Saved vs 30 years |
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15 vs 30 year mortgages: real examples
Three ways of looking at the same choice. Click any card to load it.
- The headline saving
$300,000 at 5.5% over 15 vs 6.25% over 30
Typical quotes for the two terms.
The 15-year costs far less interest, but the payment is much higher. Both numbers are what the decision turns on.
Load this scenario in the calculator → - Same rate, different term
If both were 6%
Removing the rate advantage to isolate the term.
Even at an identical rate the shorter term saves an enormous amount, purely because the money is borrowed for half as long.
Load this scenario in the calculator → - A bigger loan
$500,000 borrowed
The same rates on a larger mortgage.
The gap widens with the loan. So does the payment difference - which is the part that has to be survivable.
Load this scenario in the calculator →
Common questions about 15 vs 30 year mortgages
Is a 15-year mortgage better?
It costs far less. It also demands a much bigger payment every month for fifteen years, with no way to shrink it if things go wrong. The saving is real and large. So is the risk. This shows both so you can decide which one you can actually live with.
How much does the shorter term really save?
Usually more than half the interest, for two reasons. The rate on a 15-year loan is normally lower, and the money is borrowed for half as long. The tool works out the exact figure for your numbers rather than quoting a rule of thumb.
What if I cannot manage the bigger payment?
Then take the 30-year and pay extra when you can. You capture most of the saving and keep the option to stop in a hard month. A 15-year loan gives you no such option - the payment is the payment. Our extra payment calculator shows how close you can get.
Why is the 15-year rate lower?
A lender gets its money back sooner, so it carries less risk and charges less for it. The gap is usually somewhere between a quarter and three quarters of a percent. Enter the two rates you have actually been quoted rather than assuming.
Which is better if I might move?
The 30-year, usually. Most of the 15-year benefit comes from the later years when the balance falls quickly. Move after five years and you paid the higher payment without collecting much of the reward.
What about investing the difference?
A fair argument. The 15-year saving is guaranteed, while investment returns are not. If your mortgage rate is low, investing the difference may well do better. If it is high, the guaranteed saving is hard to beat. The tool gives you the guaranteed number to compare against.