15-Year vs 30-Year Mortgage: Which Is Better?
Quick answer
A 15-year mortgage has a higher monthly payment but usually a lower rate and far less total interest. A 30-year mortgage has a lower payment and more flexibility. For example, on a $300,000 loan, a 15-year at 5.875% costs about $2,511 a month versus $1,896 for a 30-year at 6.5%, but saves over $230,000 in interest.
Choosing between a 15-year and 30-year mortgage is a trade-off between a lower payment and a lower total cost. Here are side-by-side payment and interest examples, the pros and cons of each, and how to decide.
15-year vs 30-year mortgage at a glance
| 15-year fixed | 30-year fixed | |
|---|---|---|
| Monthly payment | Higher | Lower |
| Interest rate | Usually lower (often about 0.5 to 0.75 points) | Usually higher |
| Total interest | Much lower | Much higher |
| Equity builds | Fast | Slowly at first |
| Budget flexibility | Less | More |
| Who it suits | Higher, stable income; wants to be debt-free sooner | Most first-time buyers; tighter budgets |
Payment and interest compared
Here is principal and interest on different loan amounts, using example rates of 6.5% for 30 years and 5.875% for 15 years.
| Loan amount | 30-yr payment | 15-yr payment | Extra per month | 30-yr total interest | 15-yr total interest | Interest saved |
|---|---|---|---|---|---|---|
| $200,000 | $1,264 | $1,674 | $410 | $255,089 | $101,363 | $153,726 |
| $300,000 | $1,896 | $2,511 | $615 | $382,633 | $152,044 | $230,589 |
| $400,000 | $2,528 | $3,348 | $820 | $510,178 | $202,725 | $307,453 |
| $500,000 | $3,160 | $4,186 | $1,025 | $637,722 | $253,407 | $384,316 |
Pros and cons of a 15-year mortgage
- Pros: lower rate, far less total interest, home paid off in 15 years, equity builds quickly.
- Cons: much higher monthly payment, less room for savings and emergencies, may qualify for a smaller home.
Pros and cons of a 30-year mortgage
- Pros: lower monthly payment, easier to qualify, more cash for savings, retirement and repairs.
- Cons: much more interest over the life of the loan, slower equity growth, higher rate.
A 30-year loan with extra payments can give you much of the savings of a 15-year loan, while keeping a lower required payment.
The middle option: 30 years with extra payments
Many buyers choose a 30-year loan for the lower required payment, then pay extra toward principal when they can. Even an extra $200 a month can cut years off the loan and save tens of thousands in interest. You keep the flexibility to pay the lower amount if money gets tight. Try our extra payment calculator.
Which is right for you?
- Choose 15 years if the higher payment still keeps total housing costs comfortable (around 28% of income or less), you have a solid emergency fund, and you want to be debt-free sooner.
- Choose 30 years if you are a first-time buyer, your income may change, you want to invest or save more, or a 15-year payment would stretch your budget.
- Consider refinancing later: some owners start with 30 years and refinance to 15 when rates or income improve. See our refinance calculator.
Decide in 4 questions
- Is the 15-year payment under ~28% of income?
- Do you have 3 to 6 months of savings?
- Is your income stable?
- Would you invest the difference instead?
15 vs 30 year mortgage: equity after 5, 10 and 15 years
Total interest is only part of the story. The 15 vs 30 year mortgage choice also changes how fast you build equity, which matters if you sell, refinance or need a home equity loan. Using the same $300,000 loan and example rates (6.5% for 30 years, 5.875% for 15 years):
| After | 30-year balance | 15-year balance | Extra equity with 15-year |
|---|---|---|---|
| 5 years | About $280,800 | About $227,500 | About $53,300 |
| 10 years | About $254,300 | About $130,300 | About $124,000 |
| 15 years | About $217,700 | $0 (paid off) | About $217,700 |
If you expect to move in five to seven years, the faster equity growth of a 15-year loan can mean more cash at closing when you sell. If you stay long-term, the bigger benefit is owning the home outright in 15 years.
Worked example: extra payments vs a true 15-year loan
The middle option above is popular, so here is how it plays out on the same $300,000, 6.5%, 30-year loan (required payment about $1,896):
| Strategy | Monthly paid | Payoff time | Total interest | Interest saved vs standard 30-year |
|---|---|---|---|---|
| Standard 30-year | $1,896 | 30 years | About $382,600 | — |
| 30-year + $200 extra | $2,096 | About 23 years | About $279,200 | About $103,400 |
| 30-year + $500 extra | $2,396 | About 17.5 years | About $202,900 | About $179,700 |
| 30-year paying the 15-year amount | $2,511 | About 16 years | About $184,200 | About $198,400 |
| True 15-year at 5.875% | $2,511 | 15 years | About $152,000 | About $230,600 |
The takeaway: paying the 15-year amount on a 30-year loan gets you close, but the lower rate on a real 15-year loan still saves roughly $32,000 more in this example. You are paying about $32,000 for the flexibility to drop back to $1,896 if money gets tight. For some households, that insurance is worth it.
Income needed for each loan term
Affordability is where the 15 vs 30 year mortgage gap feels biggest.
A common guideline is keeping total housing costs near 28% of gross income. Using principal and interest only on a $300,000 loan:
- 30-year at $1,896 a month: about $81,300 a year of gross income to stay at 28%.
- 15-year at $2,511 a month: about $107,600 a year of gross income to stay at 28%.
Add property taxes, homeowners insurance and any PMI, and the income needed rises further. Our how much house can I afford guide helps you include those costs. In many 15 vs 30 year mortgage decisions, this income gap is what settles the question.
Who should choose each term
There is no single right answer in the 15 vs 30 year mortgage debate. These profiles show where each term tends to fit best.
Good fit for a 15-year mortgage
- Dual-income households with stable jobs and a full emergency fund.
- Buyers in their 40s or 50s who want the home paid off before retirement.
- Move-up buyers bringing large equity from a previous home, which keeps the loan amount small.
- Refinancers who already paid down their balance and want to finish fast.
Good fit for a 30-year mortgage
- First-time buyers who are still building savings.
- Households with variable income such as commissions, freelance work or seasonal jobs.
- Buyers who want to invest or max out retirement accounts alongside the mortgage.
- Anyone for whom a 15-year payment would push housing costs well past 28% of income.
Common mistakes in the 15 vs 30 year mortgage decision
- Comparing only the monthly payment. Look at total interest, equity growth and rate together.
- Draining savings to afford a 15-year payment. A paid-down house does not help if an emergency forces you onto credit cards.
- Assuming extra payments will happen. Set up automatic extra principal payments if you choose the 30-year path.
- Ignoring retirement contributions. Skipping an employer match to pay the mortgage faster usually costs money.
- Forgetting refinancing costs. Switching terms later means new closing costs; see our closing cost calculator.
Whichever way you go, get rate quotes for both terms on the same day so the 15 vs 30 year mortgage comparison reflects real pricing for your credit score and down payment.
How to decide on a 15 vs 30 year mortgage, step by step
- Price both terms. Ask two or three lenders for 15-year and 30-year quotes on the same day, with the same loan amount and points.
- Run the 28% check. Add taxes, insurance and any PMI to each payment and compare to your gross monthly income.
- Stress-test your budget. Could you still make the 15-year payment if one income dropped for six months?
- Check your savings. Keep three to six months of expenses after closing, whichever term you choose.
- Decide what you would do with the difference. If the extra $615 a month (in the $300,000 example) would go to retirement or investments, a 30-year loan can make sense. If it would simply be spent, a 15-year loan forces the savings.
- Think about your timeline. If you will likely move within a few years, compare equity after that period, not total interest over the full term.
What about a 20-year mortgage?
Many lenders also offer 20-year and other in-between terms. The payment and rate usually land between the 15-year and 30-year options. If the 15 vs 30 year mortgage choice feels like too big a jump, ask for a 20-year quote; it can deliver a large share of the interest savings with a payment that fits your budget more comfortably. Always compare it against a 30-year loan with planned extra payments, since that path keeps more flexibility.
Helpful resources: For more on 15 vs 30 year mortgage, see the Consumer Financial Protection Bureau and U.S. Department of Housing and Urban Development.
15 vs 30 year mortgage: frequently asked questions
Is a 15-year or 30-year mortgage better?
A 15-year mortgage saves far more interest and pays off the home faster, but has a much higher payment. A 30-year mortgage is more affordable month to month. The best choice depends on your income, savings and goals.
How much more is a 15-year mortgage payment?
On a $300,000 loan, a 15-year payment at 5.875% is about $615 a month more than a 30-year at 6.5%, but saves about $230,000 in interest.
Do 15-year mortgages have lower rates?
Usually yes. 15-year fixed rates are often about half a point to three-quarters of a point lower than 30-year rates.
Can I pay off a 30-year mortgage in 15 years?
Yes, by making extra principal payments. Check that your loan has no prepayment penalty.
How much interest do you save with a 15-year mortgage vs a 30-year?
On a $300,000 loan at the example rates in this guide (5.875% for 15 years, 6.5% for 30 years), the 15-year loan saves about $230,600 in interest. Larger loans save proportionally more.
Is it smarter to get a 30-year mortgage and pay it off early?
It can be, if you will reliably make extra payments. In this guide’s example, paying the 15-year amount on a 30-year loan pays it off in about 16 years but costs roughly $32,000 more interest than a true 15-year loan, in exchange for a lower required payment.
Sources: Consumer Financial Protection Bureau, Freddie Mac. Prices are national planning ranges, not quotes. See how we research costs.
Latest Posts
Best Boot Tray for Winter (2026): 8 Picks for Snowy, Muddy Entryways
Best Watch Winder for Automatic Watches (2026): 7 Quiet Picks and a Gift Guide for Him
Best Ice Ball Maker for Whiskey: 8 Clear Picks (2026 Gift Guide)
Best Luxury Hair Perfume for Women: 8 Designer Hair Mists Worth Gifting (2026)
Best Garment Racks With Covers (2026): Rolling, Heavy-Duty and Dust-Proof Clothes Racks
Best Tennis Bracelets on Amazon (2026): CZ, Moissanite and Lab-Grown Diamond Gifts for Her
