15 vs 30 Year Mortgage

15-year vs 30-year: the trade-off

A 30-year mortgage spreads payments over more time, so each monthly payment is lower and easier to fit in a budget. A 15-year mortgage has higher monthly payments but a lower interest rate and far less total interest — often less than half over the life of the loan. Switch the term dropdown above to see both for your numbers.

When a 30-year makes sense

The lower payment frees up cash flow for other goals, emergencies, or investing. Many borrowers choose a 30-year loan for flexibility, then make extra payments when they can to reduce interest without being locked into the higher required payment.

When a 15-year makes sense

If you can comfortably afford the higher payment, a 15-year loan builds equity faster, comes with a lower rate, and saves a large amount of interest. It suits borrowers focused on becoming debt-free sooner.

The real numbers on a $400,000 loan

On a $400,000 home with 20% down (a $320,000 loan), a 30-year term at 6.9% runs about $2,107/mo in principal and interest, with roughly $438,600 in total interest over the life of the loan. Move to a 15-year term at a typically lower 6.25% rate and the payment rises to about $2,743/mo — $636 more per month — but total interest drops to roughly $174,000, a savings of over $264,000. That gap is the core trade-off: cash flow now versus cost over time.

A middle path: extra payments on a 30-year loan

If the 15-year payment feels too tight but you want to save on interest, you can take a 30-year loan and voluntarily pay extra toward principal when your budget allows. This keeps the lower required payment as a safety net while still cutting years and interest off the loan when you're able to pay more. Our Extra Mortgage Payment Calculator shows exactly how much time and interest specific extra payments would save.