Mortgage
30-Year vs 15-Year Mortgage: The Real Numbers
Choosing between a 30-year and 15-year mortgage is one of the biggest financial decisions homebuyers make. The shorter term saves enormous amounts of interest, but comes with higher monthly payments.
The Core Trade-Off
A 15-year mortgage typically carries an interest rate 0.5–0.75% lower than a 30-year, plus you pay it off twice as fast — meaning far less total interest paid.
| 30-Year | 15-Year | |
|---|---|---|
| Loan Amount | $300,000 | $300,000 |
| Interest Rate | 6.75% | 6.25% |
| Monthly Payment | $1,945 | $2,572 |
| Total Interest | $400,278 | $163,027 |
| Total Paid | $700,278 | $463,027 |
| Interest Saved | — | $237,251 |
When 30-Year Makes Sense
- Your budget is tight — lower payment provides breathing room
- You plan to invest the difference (if you can earn more than your mortgage rate)
- You're self-employed or have variable income
- You want flexibility in case of job loss or emergency
When 15-Year Makes Sense
- You have stable, high income
- You want to be mortgage-free before retirement
- You're refinancing later in your loan term
- You want guaranteed "returns" at your mortgage rate
A smart middle path: take the 30-year mortgage but make extra principal payments. You get flexibility with faster payoff potential.