Comparison Tool

15-Year vs 30-Year Mortgage: Which Saves More

On a $300,000 loan at 6% (15-year) vs 7% (30-year), the 15-year payment is about $2,532 versus roughly $1,996 on the 30-year, but the 15-year saves about $241,000 in total interest. The 30-year frees up cash flow now at a steep long-run cost. Pick the 15-year if the higher payment is comfortable and you value interest savings; pick the 30-year if you need the lower payment or can invest the difference at a higher return.

Results

Visualization

RateFig provides estimates for educational purposes only. Mortgage and loan figures depend on your credit, fees, points, and individual lender terms. This is not financial advice. Confirm every number with a qualified loan officer before making a decision.

How It Works

We compute each term's fixed payment with the loan formula using its own rate and month count (180 for 15-year, 360 for 30-year). Total interest is payment × months − principal for each. The difference is the lifetime savings of the shorter term. The chart groups the monthly payment and the total interest so you can see both the cash-flow gap now and the cost gap over time.

What Should You Do?

The 15-year loan is mathematically superior for interest, but only if the higher payment does not crowd out retirement savings or an emergency fund. A popular compromise: take the 30-year for flexibility but pay it like a 15-year when you can, stopping if cash gets tight. If you are confident you can earn more than the mortgage rate after tax in investments, the 30-year's lower payment can be put to work — but that requires discipline and acceptable risk.

Frequently Asked Questions

Why is the 15-year rate lower?

Lenders view shorter terms as lower risk, so they usually price them with a lower rate than 30-year loans.

Which builds equity faster?

The 15-year, because more of each payment goes to principal early. You own the home outright in half the time.

Can I take a 30-year and pay extra?

Yes, and it mimics a 15-year while keeping flexibility. Our extra-payment simulator shows the exact effect.

Does the lower 30-year payment help my ratios?

Yes, the smaller payment improves your debt-to-income ratios, which can help you qualify for a larger loan.

What about tax deductions?

Both let you deduct mortgage interest, but the 15-year produces less deductible interest over time as the balance falls faster.

Is the 15-year always the better deal?

Not if the payment prevents you from saving or investing elsewhere. Match the term to your whole financial picture.