Quick Answer
A 15-year mortgage means higher monthly payments but a lower rate and far less interest; a 30-year means lower, more flexible payments but much more total interest. On a $300,000 loan: 30-year at 6.5% ≈ $1,896/month and ~$383,000 total interest; 15-year at 6.0% ≈ $2,532/month and ~$156,000 interest — saving about $227,000. Pick 15-year to save and own sooner, 30-year for lower payments and flexibility (you can also just pay extra on a 30-year).
The choice between a 15-year and 30-year mortgage is really a trade between monthly payment and total interest. Here's the math on a $300,000 loan, and how to decide.
15-year vs. 30-year on a $300,000 loan
| 30-year @ 6.5% | 15-year @ 6.0% | |
|---|---|---|
| Monthly P&I | $1,896 | $2,532 |
| Total interest | $382,633 | $155,683 |
| Total paid | $682,633 | $455,683 |
| Payoff time | 30 years | 15 years |
The 15-year costs about $636 more a month but saves roughly $227,000 in interest and pays off in half the time.
Illustrative rates; your actual rates and the gap between terms will vary.
Which one fits you
Choose 15-year if…
- You can comfortably afford the higher payment
- You want to save big on interest
- You want to own your home sooner
Choose 30-year if…
- You want lower, flexible payments
- You'd rather invest the difference
- You value cash-flow cushion
The middle path
- Take a 30-year and pay extra principal when you can — faster payoff, but you can drop back to the lower payment if needed.
- You won't get the 15-year's lower rate, but you keep control of your cash flow.
Compare both with the mortgage calculator, and see how extra payments change the payoff with the amortization calculator. See also how much is a mortgage payment.