15-Year vs 30-Year Mortgage: Which Is Better?
A 15-year mortgage costs much less in total interest but has a higher monthly payment. A 30-year mortgage has a lower payment and more flexibility but costs far more over time. On a $320,000 loan at 6.5%, the 30-year payment is about $2,023 and total interest is about $408,000. The 15-year payment is about $2,788 and total interest is about $182,000.
Side-by-side example
Take a $400,000 home with 20% down, so the loan is $320,000. To compare the terms fairly, the table first uses the same 6.5% rate for both loans. In real life, 15-year rates are usually lower than 30-year rates, so we also show an example with a lower 15-year rate of 5.75%. These are example rates, not current quotes.
| 30-year at 6.5% | 15-year at 6.5% | 15-year at 5.75% | |
|---|---|---|---|
| Principal and interest | $2,023 | $2,788 | $2,657 |
| Total interest paid | $408,142 | $181,758 | $158,316 |
| Total with tax and insurance* | $2,514 | $3,279 | $3,149 |
*Using 1.1% property tax and $1,500 a year of home insurance on a $400,000 home.
At the same rate, choosing 15 years saves about $226,000 in interest but costs about $765 more each month. You can change every number in the mortgage calculator.
What income you need
Using the common guideline that housing should be at most 28% of gross income, the 30-year payment of about $2,514 needs an income of roughly $108,000. The 15-year payment of about $3,279 at 6.5% needs roughly $141,000. A lender may approve you for the larger payment, but that does not mean it fits your budget. Read our guide on how much house you can afford for the 28/36 rule.
Why the 30-year loan is popular
- Lower required payment: that leaves room in your budget for emergencies, retirement saving and other goals.
- Flexibility: you can always pay extra. Adding $500 a month to the 30-year loan above pays it off in about 18 years and saves roughly $185,000 in interest, but you can stop the extra payments in a tight month. The 15-year payment is not optional.
- Easier to qualify for a larger home with a lower payment.
Why the 15-year loan can be a good deal
- Much less interest overall.
- Usually a lower interest rate than the 30-year loan.
- Build equity faster: more of each payment goes to principal.
- Debt-free sooner, which helps if you want to be mortgage-free before retirement.
How to decide
The 15-year loan is often a good fit if the payment fits comfortably within your budget, you already have an emergency fund, you are saving for retirement and you have a stable income. The 30-year loan is often better if the 15-year payment would stretch you or if you want flexibility to invest the difference. Remember that money you do not put toward the mortgage can be invested, but investment returns are not guaranteed, so compare the mortgage rate with your expected return. Our guide on paying off debt or investing explains that choice.
What if you invest the difference instead?
A popular argument for the 30-year loan is to invest the monthly savings. Here is the honest math using our example. After 15 years the 30-year loan still has a balance of about $232,000. If you had invested the extra $765 a month at 7% for 15 years, you would have about $242,000. That is roughly even, with a small advantage to investing, but only if the market delivers 7% a year. At a 5% return the investment grows to only about $204,000, which is less than the remaining mortgage. The 15-year loan is a guaranteed result, and the investing plan is not.
Checklist before you decide
- Can you afford the 15-year payment with a full emergency fund and retirement saving still in place?
- Is your income stable for the next several years?
- Have you compared real offers for both terms from several lenders?
- Do you plan to stay long enough to benefit? If you may move in five years, the lower payment and flexibility of a 30-year loan matter more.
Other options
- 20-year loan: a middle ground.
- Refinance later: if rates fall, the refinance calculator shows whether the savings cover the closing costs.
- Larger down payment: reduces the loan size under either term. See the down payment calculator.
Try the calculators
Frequently asked questions
Is a 15-year mortgage worth it?
It can be if you can afford the higher payment without giving up emergency savings or retirement contributions.
Can I pay off a 30-year mortgage early?
Most mortgages allow extra payments. Check your loan for a prepayment penalty, which is uncommon on home loans today, and make sure extra money goes toward principal.
Do rates differ between terms?
Usually the 15-year rate is lower, but the size of the gap changes with the market, so compare current offers.
This guide is for general information. Figures use 2026 US federal rules and the assumptions stated above, and are estimates, not financial, tax or legal advice. Check IRS.gov or a qualified professional for your situation.