15 vs 30 year mortgage calculator

Three ways to run it

Or invest the difference

Taking the 30-year loan frees up — a month. Invested at 7% for 15 years that is worth —, against — of interest saved by the 15-year loan. Model the growth in detail on the future value calculator.

How to decide between a 15-year and a 30-year mortgage

The comparison comes down to three trade-offs: the size of the required payment, the interest you pay over the life of the loan, and what else that money could be doing. A 15-year loan is effectively a forced savings plan earning a guaranteed return equal to its interest rate. A 30-year loan is a cheaper monthly commitment that leaves the decision — invest, save or spend — up to you every month.

Two details change the answer more than people expect. First, the PMI you pay while below 20% equity disappears sooner on a 15-year loan, because equity builds far faster. Second, the mortgage interest deduction is worth less than it looks if you take the standard deduction — the after-tax rate you should compare against your investment return is often simply the quoted rate.

Common questions

Is a 15-year mortgage always cheaper than a 30-year?

In total interest, yes — a shorter term at a lower rate costs far less, often less than half the lifetime interest on the same loan amount. But the higher monthly payment reduces the cash you can invest or keep as a buffer, so the better choice depends on what that difference would earn and how secure your income is.

Why is the 15-year mortgage rate lower?

Lenders take on less duration risk and less credit risk over 15 years, so 15-year fixed rates are typically 0.5–0.75 percentage points below 30-year rates. Enter today's quoted rates for both terms above rather than assuming a fixed spread.

How much higher is the payment on a 15-year mortgage?

Roughly 40–50% higher for the same loan amount at typical rate spreads — not double, because the shorter term carries a lower rate and less interest overall. The calculator shows the exact difference for your numbers.

Can I take a 30-year mortgage and just pay it like a 15-year?

Yes, and it keeps flexibility: if income drops you can fall back to the required 30-year payment. The cost is that you pay the higher 30-year rate the whole time, so you finish slightly later and pay somewhat more interest than a true 15-year loan. That middle strategy is the third row in the comparison table above.

When does investing the difference beat the 15-year mortgage?

When your after-tax investment return exceeds your after-tax mortgage rate over the same period, and you actually invest the difference every month rather than spending it. Use the invested-difference figure above as the break-even test for your assumed return.

Does a 15-year mortgage help me avoid PMI?

Not directly — PMI depends on your loan-to-value ratio, not the term. But a 15-year loan builds equity much faster, so you cross the 80% LTV threshold and can drop PMI years sooner. Model that on the PMI calculator.

Which term is better if I plan to move in a few years?

If you expect to sell within five to seven years, most of either payment goes to interest and the total-interest advantage of the 15-year term barely materialises. The lower 30-year payment usually wins on flexibility in that case.

Can I refinance from a 30-year into a 15-year later?

Yes, and it is common once rates drop or income rises. Weigh the closing costs against the interest saved using the refinance break-even calculator before committing.

Keep going

• Not committing to a 15-year term? Model voluntary overpayments on the extra payments calculator or the early payoff calculator.
• Already have a 30-year loan? Check whether switching pays for itself on the refinance break-even calculator.
• Splitting the payment instead of the term? See the biweekly mortgage calculator.
• Unsure about the terminology? The mortgage glossary and our calculation methodology explain every figure on this page.