15-Year vs 30-Year Mortgage: Total Cost and Monthly Payment Compared
Compare 15-year and 30-year fixed mortgages by monthly payment, interest rate, total interest paid, and flexibility to find the term that fits your budget.
Quick comparison
Compare 15-year and 30-year fixed mortgages by monthly payment, interest rate, total interest paid, and flexibility to find the term that fits your budget. The right choice depends on the loan purpose, credit profile, income stability, repayment timeline, and how much risk a borrower is willing to accept.
Monthly payment
A 15-year loan has a much higher monthly principal and interest payment because the balance is repaid in half the time.
Interest rate
15-year fixed rates are usually lower than 30-year fixed rates. The gap changes with the market, so compare current quotes.
Total interest
A 15-year loan typically costs far less interest over its life because of the lower rate and shorter repayment period.
Example: $300,000 loan
At an illustrative 6.5% for 30 years, principal and interest is about $1,896 a month and about $383,000 in total interest. At 5.75% for 15 years, it is about $2,491 a month and about $148,000 in total interest. Real rates vary.
Flexibility
A 30-year loan has a lower required payment. Borrowers can often make extra principal payments to pay it off faster when money allows.
Equity
A 15-year loan builds home equity much faster in the early years.
How to evaluate this option
Borrowers should compare offers using the full cost of credit. That means reviewing APR, required fees, repayment term, monthly payment, total interest, late-payment policy, prepayment rules, and whether the loan is secured by an asset.
Provider type also matters. Banks may reward existing relationships, credit unions may offer member-focused pricing, online lenders may provide fast quotes, and government-backed programs may offer unique benefits for eligible borrowers.
Key takeaways
- Choose a 15-year loan if the higher payment fits easily and you want to save on total interest.
- Choose a 30-year loan if a lower payment protects your budget or frees money for savings and retirement.
- A 30-year loan with regular extra payments can be a middle ground, as long as the loan has no prepayment penalty.
- Compare the full Loan Estimate for each term, not just the rate.
Provider examples to compare
These examples are starting points for research, not endorsements or guaranteed approvals. Availability, rates, fees, underwriting, and state coverage can change.
Risks and cautions
- A higher payment can strain your budget if income drops or expenses rise.
- Do not drain emergency savings to qualify for a shorter term.
- Taxes and insurance are added to both options and can make the real payment higher than principal and interest alone.