15-Year vs. 30-Year Mortgage Calculator

When considering a fixed-rate loan, nearly 90% of buyers choose a 30-year mortgage vs. a 15-year mortgage. But why? It often comes down to affordability. When you choose a mortgage, you’re not just picking a loan term; you’re shaping your monthly budget and long-term wealth for years to come. A 30-year loan tends to have a lower monthly payment compared to a 15-year loan, but the tradeoff is you’ll pay much more in interest over those 30 years. Let’s run the numbers between a 15-year and a 30-year mortgage and consider the pros and cons of each so you can make the right choice for your situation.

Key Takeaways

• The main difference between a 15-year vs. 30-year mortgage is the repayment period, which affects monthly payment and total repayment amounts.
• 15-year mortgages usually have higher monthly payments, but you’ll pay less interest over the term of the loan.
• 30-year mortgages typically have smaller monthly mortgage payments, but you’ll pay much more in interest by the time the home is paid off.
• You may find it easier to qualify for a 30-year mortgage, which could help you buy the home you want.
• If you want to pay less interest and own your home faster, go with the 15-year mortgage.

What's the difference between a 15-year and 30-year mortgage?

The 30-year mortgage is by far the most common option in the U.S., providing a way to pay off your home over 30 years. Since the repayment period is stretched over so many years, monthly payments are affordable for more home buyers. On the other hand, you'll pay interest for 30 years, which drives up the overall cost.

Compare that to a 15-year mortgage, which repays the loan in half the time. Because you're compressing the repayment timeline to 15 years, each monthly payment needs to be bigger than it would be with a 30-year mortgage. On the other hand, you can shave thousands in interest off your overall costs with a 15- vs. 30-year mortgage.

Example of 15- vs. 30-year mortgage terms

Let's suppose you want to borrow $450,000 for a new home, and you're trying to choose between a 15-year mortgage and a 30-year one. In the example below, the interest rate is higher for the 30-year mortgage than for the 15-year, as lenders tend to charge higher rates for longer terms. Here's how the two loans would stack up:

15-year mortgage 30-year mortgage Amount borrowed $450,000 $450,000 Interest rate 6.0% 6.5% Monthly payments $3,797.36 $2,844.31 Total interest $233,524.03 $573,950.20 Overall mortgage cost $683,524.03 $1,023,950.20

Disclaimer: The figures shown in the example above are for illustrative purposes only and do not reflect current market rates or actual loan offers. Your mortgage terms, including interest rate, monthly payment, and total cost, will vary based on your credit profile, loan amount, location, and other factors.

When you do the math, the 30-year mortgage costs $340,426.17 more than the 15-year loan, even though the monthly payments are lower.

When a 15-year mortgage makes sense

You might consider a 15-year mortgage if you want to be mortgage-free faster and can afford the higher monthly payments. It's also the better choice if you want to save money on interest, since the rates may be lower and you'll spend half the time paying interest than you would with a 30-year mortgage.

Here are some pros and cons to consider:

Pros

• Faster payoff: You'll own your home outright in just 15 years. Compared to a 30-year loan, that's 15 years with no mortgage payment.
• Save money: Mortgages with 15-year repayment periods typically have lower interest rates and a faster repayment timeline, meaning you could save tens of thousands of dollars on interest.
• Accelerate your equity: Since you'll be paying your home off faster, you'll be building equity faster, too. That gives you additional flexibility for borrowing against it if you need to.

Cons

• Higher monthly payments: Shorter timelines mean higher monthly payments, which could strain your budget.
• Less flexibility: With more of your money going to your mortgage each month, you'll have less cash flow to handle other day-to-day needs or unexpected expenses.
• Tougher to qualify: It can be tougher to qualify for a 15-year-loan with its higher payments, which may mean your approved loan amount will be smaller.

When a 30-year mortgage makes sense

With a 30-year mortgage, you have a longer repayment timeline, which gives you a little more flexibility. Your monthly payments will be smaller, although you'll wind up paying more in interest over the life of the loan.

Choosing this loan to buy a home makes sense when you want to control your budget but retain the flexibility to make larger payments when possible. It can also be a way to boost home affordability and allow you to buy a more expensive home compared to the 15-year loan, since it may be a little easier to qualify and the longer term means lower payments.

Here are the pros and cons to keep in mind:

Pros

• Smaller monthly payments: Extending the repayment timeline effectively shrinks your monthly mortgage payments, since you have longer to pay back the loan. This could be useful for budgeting and affordability.
• Greater flexibility: You can make your regular mortgage payment each month, but you're also free to pay additional money toward your principal when your budget allows. That lets you adjust to life's demands as necessary.
• May be easier to qualify: When lenders consider your ability to repay a loan, one of the things they look at is your income compared to your debts. A smaller mortgage payment means your income can stretch farther than with a 15-year mortgage.

Cons

• More interest: The downside to a 30-year loan is the length of time you'll be paying interest. When you consider that 30-year mortgages often have higher mortgage rates, too, it's likely you'll be paying much more in borrowing costs than you would with a 15-year loan.
• Longer path to homeownership: With smaller payments, you'll also be building equity more slowly and it'll be twice as long before you own your home outright.

How to decide between a 15-year mortgage or a 30-year mortgage

The best way to decide between a 15-year vs. 30-year mortgage is to consider your priorities and then run your numbers.

Which is more important to you: a manageable monthly payment, becoming mortgage-free as soon as possible, or cutting your interest costs? If your payment is the deciding factor, a 30-year mortgage might be preferable. If you want to pay less for your home overall and own it outright as soon as possible, then you might choose the 15-year loan.

When calculating what each option will cost you, keep these numbers in mind:

• Your monthly budget
• How much you have saved for a down payment
• Your credit history

These factors influence how much you can afford to borrow and what your interest rate may be, and those in turn will influence how much you pay for the home in total. Keep in mind that a good or exceptional credit score will help you get a lower mortgage rate. Use a mortgage calculator to compare your options and learn how to get a mortgage that will meet your needs.

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