15-Year Mortgage vs 30-Year Mortgage
Pay double the monthly to save hundreds of thousands in interest - the home loan math most buyers ignore.
TLDR
On a $400K mortgage: 15-year at 6.0% costs $3,376/month with $207K total interest. 30-year at 6.75% costs $2,594/month with $533K total interest. The 15-year saves $326K in interest but costs $782/month MORE - which, if invested at 7%, would grow to $467K over those 15 years. The math says invest the difference; the discipline says pay it off. Honest answer is what you'll actually do, not what looks best on paper.
Side-by-side comparison
| Criterion | 15-Year Mortgage | 30-Year Mortgage | Winner |
|---|---|---|---|
| Monthly payment ($400K loan) | $3,376 at 6.0% | $2,594 at 6.75% | 30-Year Mortgage |
| Total interest paid | $207,617 | $533,728 | 15-Year Mortgage |
| Total paid (principal + interest) | $607,617 | $933,728 | 15-Year Mortgage |
| Time to debt freedom | 15 years | 30 years | 15-Year Mortgage |
| Equity build-up in year 5 | ~30% of loan paid down | ~10% of loan paid down | 15-Year Mortgage |
| Interest rate (typical) | 0.50-0.75% below 30-year rate | Higher rate (longer-duration risk) | 15-Year Mortgage |
| Cash flow flexibility | Tighter - higher mandatory payment | More room - lower mandatory payment | 30-Year Mortgage |
| Mortgage interest tax deduction | Less to deduct (paying it off faster) | More to deduct over longer period | 30-Year Mortgage |
| Refinance risk if rates rise | Less exposure (shorter term) | More exposure (locked in longer) | 15-Year Mortgage |
| Forced savings via principal | High - large chunk of payment is principal early | Low - mostly interest in early years | 15-Year Mortgage |
| Best for | Established income, no other debt, savings focus | First home, growing income, flexibility focus | varies |
| Down payment requirement | Same minimums apply | Same minimums apply | Tie |
Run your own numbers
Plug in your numbers - the calculator updates instantly. Same math, your inputs.
Estimates only. Returns are not guaranteed. Tax rules and rates current as of 2026-05-16.
When each one wins
When 15-Year Mortgage wins
- You can afford the higher monthly payment without straining your budget
- You have a stable, predictable income for the next 15 years
- You're within 15-20 years of retirement and want debt-free by then
- You've struggled to save in the past - the 15-year is FORCED savings
- You can also fully fund 401(k) match + Roth IRA at the same time
When 30-Year Mortgage wins
- You're early in your career and your income will grow significantly
- You have higher-return opportunities elsewhere (employer match unfunded, high-interest debt to pay off)
- You want maximum cash flow flexibility for unexpected expenses
- You're disciplined enough to actually invest the monthly difference at 7%+
- Your area has high property tax + the mortgage interest deduction matters to you
The math (typical scenario)
$400,000 mortgage. 15-year fixed at 6.00% vs 30-year fixed at 6.75% (typical 0.75% spread). Plus opportunity cost analysis:
15-year fixed at 6.00% Monthly P&I: $3,376 Total payments (180 months): $607,617 Total interest: $207,617 Year-5 balance: ~$308,000 (23% paid down) Year-15: $0 (paid off!) 30-year fixed at 6.75% Monthly P&I: $2,594 Total payments (360 months): $933,728 Total interest: $533,728 Year-5 balance: ~$378,000 (5.5% paid down) Year-15: ~$304,000 (still 76% remaining) Year-30: $0 Interest savings from 15-year: $326,111 Opportunity cost analysis: take the 30-year, invest the difference Monthly difference: $3,376 - $2,594 = $782 invested at 7% return After 15 years invested: $782 * [(1.07^15 - 1) / 0.07] * 12 = $251,733 Plus 30-year mortgage still has $304K balance at year 15 Net position: -$304K mortgage + $252K investment = -$52K NET Take the 15-year instead at year 15: $0 mortgage, no investment from difference = $0 NET BUT continue investing same $782/mo (now freed up) for the next 15 years: Year 30 portfolio: $252K * 1.07^15 + $782 * 12 * [(1.07^15-1)/0.07] = $946K Net at year 30: 15-year strategy: $946K invested 30-year strategy: $252K * 1.07^15 = $695K invested (because you stopped investing the difference after year 15) Plus the 15-year has 5 EXTRA years of fully-invested $3,376/mo savings = $362K more Bottom line: 15-year tends to win net-net IF you actually invest the savings after the mortgage is paid off. Most people don't.
When the math actually breaks each direction
The rate spread matters more than you think
Lenders typically charge 0.50-0.75% MORE for a 30-year vs 15-year mortgage (longer-duration risk). On $400K, that's $1,500-$2,500/year in extra interest cost on the 30-year. Combine that with the longer term and you get the dramatic $325K+ lifetime interest gap. If the spread is wider (1%+), the 15-year wins more decisively; if the spread is narrow (0.25%), the 30-year + invest-the-difference strategy has a clearer edge.
The 'invest the difference' assumption is fragile
Academic math says: take the 30-year, invest the $782/month savings at 7-10% market returns, end up wealthier. In practice DALBAR studies show the average mutual fund investor earns 4-5% LESS than the fund returns due to bad timing and panic selling. If your real investing return is 5% (not 8%), the 'invest the difference' strategy mathematically falls behind the 15-year. Most people would be better served by forced equity build-up via the shorter mortgage.
The biweekly hack on a 30-year
If you take a 30-year but make biweekly payments (half monthly amount every 2 weeks), you make 26 half-payments = 13 full payments per year (vs 12). This shortens a 30-year by ~6 years and saves about $80K-$120K in interest on a typical loan. You get most of the 15-year's interest savings while keeping the flexibility to skip the extra payment if cash gets tight.
The refinance escape hatch
If you take a 30-year and rates fall 1-1.5%, you can refinance to a new 30-year at the lower rate (or refi to a 15-year if you can afford the higher payment). The 15-year doesn't really offer the same flexibility - you're locked into the higher payment. So the 30-year offers a real option value the 15-year doesn't. In a low-rate environment, that flexibility is worth less; in a high-rate environment (like late 2025-2026), it's worth a lot.
Frequently asked questions
How much can I save with a 15-year mortgage vs 30-year?
On a $400K loan at typical rates, the 15-year saves about $325K in lifetime interest - roughly equal to the loan principal itself. Use the calculator above for your exact numbers.
Why does the 15-year usually have a lower interest rate?
Lenders price in duration risk - locking in a rate for 30 years is riskier (for the lender) than 15 years. The spread is typically 0.50-0.75% lower for the 15-year mortgage.
What's the downside of a 15-year mortgage?
Higher monthly payment (often 25-35% more than a 30-year on the same loan). This constrains cash flow for other priorities: retirement savings, kid's college, emergency fund, vacation, home improvements.
Can I make extra payments on a 30-year to mimic a 15-year?
Yes - this is the 'have your cake and eat it' approach. Take the 30-year for flexibility, but add the extra principal each month (about $782/mo on a $400K loan to mimic a 15-year). You get the lower required payment but the same payoff timeline IF you stick to it.
Will paying off my mortgage early reduce my tax deduction?
Yes, but typically not enough to matter. Most borrowers in the 22-24% bracket get only a tiny benefit from mortgage interest deduction (it's only deductible if you itemize, which most don't with the $30K standard deduction in 2026). The interest you save is far more than the deduction lost.
Is a 20-year mortgage a good compromise?
Yes - some lenders offer 20-year mortgages at a rate between 15-year and 30-year (~0.25% above 15-year). Saves significant interest vs 30-year while having a more manageable payment than 15-year. Less common but available at most large lenders.
What if I lose my job during a 15-year mortgage?
This is the real risk - the higher payment is mandatory. With a 30-year + investing the difference, you have an investment buffer you can tap. Build a 6-12 month emergency fund BEFORE taking on a 15-year mortgage.
Should I refinance my 30-year to a 15-year if rates dropped?
Run the numbers: if your remaining balance is small and the rate drop is significant, yes. If you're 10+ years in, the math often favors keeping the 30-year and paying extra principal - same result, more flexibility.
Is biweekly payment really equivalent to a 15-year?
Not equivalent - biweekly on a 30-year saves you ~6 years (paid off in 24 years instead of 30). It's a great middle ground but doesn't fully match the 15-year's faster pay-down.
How does PMI factor into the comparison?
PMI (private mortgage insurance) applies to either when down payment < 20%. PMI rates are based on loan-to-value, not term. You'll typically reach 20% equity faster on a 15-year (about 4-5 years vs 9-11 years on a 30-year), so 15-year shortens the PMI period.