30-year vs 15-year
payment and interest
The 15-year loan usually wins on total interest. The 30-year loan wins on monthly cash flow and flexibility. The right answer depends on which constraint is tighter.
A simple example
On a $320,000 loan at 6.5%, a 30-year payment is about $2,022 per month. A 15-year payment is about $2,788. The 15-year loan costs roughly $181,000 less in total interest, but requires about $766 more each month.
Why the 30-year can still make sense
A lower required payment leaves room for an emergency fund, investing, or other debt. You can also pay extra principal on a 30-year loan in good months without being contractually obligated to do so in bad months.
Why the 15-year can make sense
If the payment is comfortably affordable and the emergency fund is funded, the 15-year loan forces discipline and cuts interest. It also builds equity faster.
How to compare properly
Use the same loan amount and rate, then compare the monthly payment, total interest and the balance after five years. Do not compare only the rate or only the payment.
FAQ
Is 15-year always cheaper?
It usually has less total interest, but the higher payment can strain cash flow.
Can I pay a 30-year like a 15-year?
Yes, with extra principal. The mortgage calculator has an extra payment field.
Compare in the mortgage calculator
Estimate only; not a loan offer or financial advice.