15-Year vs. 30-Year Mortgage: Which Is Right for You?

Choosing between a 15-year and 30-year mortgage is one of the biggest financial decisions you'll make as a homebuyer. Both have distinct advantages and trade-offs. Let's break them down.

The Key Differences

Feature	15-Year	30-Year
Monthly payment	Higher	Lower
Interest rate	Usually 0.5–0.75% lower	Higher
Total interest paid	Much less	Much more
Time to own free and clear	15 years	30 years
Monthly flexibility	Less	More

A Real-World Comparison

Let's compare both options on a $300,000 home with a $60,000 down payment ($240,000 loan):

	15-Year at 5.44%	30-Year at 6.09%
Monthly payment	$1,961	$1,449
Total interest paid	$112,980	$281,640
Total cost	$352,980	$521,640
Interest savings	$168,660 saved with 15-year

The 15-year mortgage saves you nearly $170,000 in interest — but your monthly payment is $512 higher.

When to Choose a 15-Year Mortgage

• You can comfortably afford the higher monthly payment
• You want to build equity faster
• You're closer to retirement and want to be debt-free sooner
• You want to save significantly on total interest

When to Choose a 30-Year Mortgage

• You need lower monthly payments for cash flow flexibility
• You want to invest the difference in higher-return assets
• You're buying in an expensive market and need affordability
• You value financial flexibility over faster payoff

The Middle Ground: 30-Year with Extra Payments

A popular strategy is to take a 30-year mortgage (for the lower required payment) but make extra payments toward principal when you can. This gives you the flexibility of a 30-year term with the interest savings of a shorter term.

Even adding just $200/month in extra principal payments to a 30-year mortgage can shave off 7+ years and save tens of thousands in interest.

The Bottom Line

There's no universally "right" answer. The best choice depends on your income stability, financial goals, and risk tolerance. Use our mortgage calculator to model both scenarios with your specific numbers.