← All tools

15 vs 30 Year Comparison

Should you pick a 15- or 30-year mortgage?

Enter how much you’d borrow and the rate you’d get on each loan length. We’ll compare the monthly payments and total interest, and test whether taking the 30-year and investing the savings could leave you ahead.

  1. Same loan, two speeds

    A 15-year mortgage is paid off in half the time, so each monthly payment is higher. In return it usually gets a lower rate, and you pay interest for half as long, so the total interest is far lower.

  2. The 30-year frees up cash

    The 30-year’s lower payment leaves money in your pocket each month. Giving up what that money could have earned elsewhere is called an .

  3. We compare you at year 15

    At year 15 the 15-year loan is paid off. With the 30-year, you still owe a balance, but if you invested the monthly difference you also have savings. Whichever leaves you with more (savings minus what you owe) is ahead.
Ask each lender to quote both loan lengths on the same day so the rate gap you enter is real. See Choosing a lender for how to compare quotes.
The two loans

The amount you'd borrow (price minus down payment) and the rate quoted for each loan length.

$
%
%
Your plans

Used to test the 30-year-and-invest strategy and to show when each loan would be paid off.

%

Ahead at year 15

15-year

The 15-year comes out $35,068 ahead at year 15, even if you invest the monthly difference at 7%. It saves $307,453 in lifetime interest and pays off the home at age 50.

30-year loan payment

$2,528

principal + interest at 6.5%

15-year loan payment

$3,348

principal + interest at 5.875%

Monthly difference

$820

15-year costs more each month

Interest saved with 15-year

$307,453

$510,178 vs $202,725 total

Home paid off at age

50 / 65

15-year / 30-year

Wealth gap at year 15

$35,068

15-year ahead

What this means

The 15-year costs $820 more each month ($3,348 vs $2,528). In exchange you’d pay $307,453 less interest and own the home outright 15 years sooner. At year 15, the 30-year still has $290,237 left to repay, while investing the $820 difference at 7% would grow to about $255,169.

The answer turns on how big the rate gap is and what your investments earn. This comparison leaves out taxes on investment gains and the mortgage interest deduction. If you lean toward the 15-year, check that its higher payment still leaves room for savings and emergencies.

If your investments earned

5% a year instead of 7%15-year +$73,027
9% a year instead of 7%30-year +$10,481

Which loan is ahead at year 15, and by how much.

What you owe vs what you’ve invested

30-year loan balance 15-year loan balance Savings if you take the 30-year and invest the difference (7%/yr)
$0$140,804$281,607$422,411$563,215$704,019Yr 0Yr 5Yr 10Yr 15Yr 20Yr 25Yr 30

Paying off a 15-year loan earns a guaranteed return equal to its interest rate, since every dollar of the loan you retire stops costing interest. Taking the 30-year and investing the difference earns an expected return at the market rate, with stock-market risk. With today’s spread between mortgage rates and bond yields, the two can come out close. The 30-year result also assumes you invest the difference every month for 15 years. If you wouldn’t, the 15-year works as forced savings and makes you mortgage-free at 50.

Results are estimates based on your inputs and the assumptions on this page, not quotes or advice. A lender, servicer, or tax advisor will give you different numbers. Disclaimer

Something look off? Report it

Terms used on this page

The ideas behind trading a higher payment for less interest.

Loan term
How many years you have to repay the loan. A 15-year term has higher monthly payments than a 30-year term but far less interest overall.
Loan amount
What you borrow: the home price minus your down payment. A $500,000 home with $100,000 down is a $400,000 loan.
Principal and interest
The loan part of your monthly payment. Principal pays down what you borrowed; interest is the lender’s charge for lending it. Taxes and insurance are the same under either term, so they’re left out here.
Total interest
Everything you pay the lender beyond the amount you borrowed, over the whole life of the loan.
Remaining balance
What you still owe on the loan at a given point. With a 30-year loan, a large balance is still left at year 15.
Opportunity cost
What you give up by using money one way instead of another. A bigger mortgage payment is money you can’t invest, and investing is money you don’t put toward the loan.
Investment return
How much an investment grows per year on average. Stock returns are uncertain and swing from year to year; a mortgage payoff saves its interest rate with certainty.
Forced savings
Building wealth through a required payment, like a higher 15-year mortgage payment, instead of relying on yourself to invest the difference each month.

Keep learning

Next steps

Report a problem

On

What kind of problem?