Rates, terms and points
15-year vs 30-year mortgage: payment, interest and flexibility
A 15-year mortgage can cut total interest by more than half. It can also raise the payment so much that a household loses its cushion. The right answer depends less on rates than on what the payment gap would do to your budget.
Reviewed November 2026 · Written for Buy Home Tips from the sources listed below
The loan term is the number of years you have to repay. Most first-time buyers choose between 30 and 15 years. The term changes three things at once: your monthly payment, the total interest you pay and, often, the rate a lender quotes. Shorter terms usually mean higher payments and frequently come with lower rates.
The arithmetic
Take a $280,000 loan. For this example, assume quotes of 6 percent on a 15-year fixed loan and 6.5 percent on a 30-year fixed loan. These are placeholders to show the math; use your own quotes.
| 15-year at 6% | 30-year at 6.5% | |
|---|---|---|
| Monthly principal and interest | $2,363 | $1,770 |
| Total interest if kept to the end | $145,304 | $357,125 |
| Difference in payment | $593 more a month |
The 15-year loan saves about $212,000 in interest over the life of the loan. The 30-year loan frees about $593 a month. Both figures exclude taxes, insurance and mortgage insurance, which are the same for both terms.
What the 15-year loan gives you
- Much less interest, because you borrow for half the time and often at a lower rate.
- Faster equity. More of each payment goes to principal from the start, which helps if you need to sell or refinance.
- A finish line. You are mortgage-free sooner, which some households value for retirement planning.
What the 30-year loan gives you
- A lower required payment, which is easier to qualify for and easier to carry through a job loss or a costly repair.
- Flexibility. You can pay extra when money is good and stop when it is not.
- Room for other goals, such as an emergency fund, retirement savings or childcare.
How to decide
Start with the payment gap. If the 15-year payment would leave you with little or no monthly savings, the risk is not worth the interest saved. If you would comfortably save the difference anyway and have a solid emergency fund, the 15-year loan's lower rate and faster payoff are hard to beat.
Then think about time. If you expect to sell within a few years, total interest over 30 years is less relevant than the payment and cash to close.
Comparing offers
Request Loan Estimates for both terms on the same day, ideally from more than one lender. Page 1 shows the monthly principal and interest. Page 3's comparisons section shows how much you will pay in principal, interest, mortgage insurance and loan costs over the first five years. The calculator on this page lets you test your own quotes.
Other terms
Fixed-rate loans also come in 20- and 25-year terms at many lenders, and some offer terms in between. If the 15-year payment is too high but you want a faster payoff than 30 years, ask for a Loan Estimate on a 20-year term. Run it through the same comparison: payment, total interest and what the payment gap does to your monthly savings.
Mini calculator: 15-year versus 30-year
Same loan, two terms. Type the rate each term is quoted at on a real Loan Estimate to compare the monthly payment and the total interest if you keep the loan to the end.
Placeholder rates only. Use the rates on your own Loan Estimates; real quotes change daily.
Decide with your numbers
- Get Loan Estimates for both terms on the same day from the same lender.
- Compare the monthly payment difference with your current monthly savings.
- Keep an emergency fund after closing with either choice.
- Ask whether the loan has a prepayment penalty before planning extra payments.
- Decide how long you expect to keep the home.
Questions buyers ask
Is a 15-year or 30-year mortgage better?
Neither is better for everyone. A 15-year loan builds equity faster and costs much less interest. A 30-year loan has a lower required payment, which leaves room for savings, other goals and emergencies.
Why are 15-year mortgage rates lower?
Lenders often price shorter terms lower because their money is at risk for less time. Check your own Loan Estimates, since the gap varies.
Can I pay off a 30-year mortgage in 15 years?
Often yes, by paying extra principal each month, as long as the loan has no prepayment penalty. You keep the flexibility to stop, but you pay the 30-year rate.
Does the term affect how much I can borrow?
Yes. A higher payment on a 15-year loan raises your debt-to-income ratio, so the same income supports a smaller loan.
Sources checked for this page
Checked November 2026. Programs and limits change; confirm with the source before you rely on a figure.