15 vs 30 Year Comparison
Should you pick a 15- or 30-year mortgage?
At year 15
15-year
The 15-year wins by $30,263 at year 15 even under generous assumptions about the market. The 15-year saves $307,453 in lifetime interest and pays off the home at age 50.
Monthly P&I (30yr)
$2,528
at 6.500%
Monthly P&I (15yr)
$3,348
at 5.875%
Monthly difference
$820
15-yr costs more/mo
Lifetime interest saved (15yr)
$307,453
$510,178 − $202,725
Paid off at age
50 / 65
15-yr / 30-yr
Net wealth difference at year 15
$30,263
15-yr ahead
Loan balance + portfolio over time
The math, plainly: the 15-year is a guaranteed after-tax return equal to its rate. The 30-year-plus-invest is an expected return at the market rate, with stock-market-style risk. With today's spread between mortgage rates and bond yields, this is closer than people assume. The behavioral question matters too: will you actually invest the difference every month for 15 years? Most people don't. If you wouldn't, the 15-year is forced savings + freedom-by-age-50.