15-year vs. 30-year fixed mortgage calculator
15-year vs. 30-year mortgage
A 15-year mortgage allows you to pay off your mortgage in half the time of a 30-year mortgage. It typically comes with a lower interest rate, and you’ll pay much less interest over the life of the loan. However, because you’re paying off the loan twice as fast, your monthly payment will be much higher than with a 30-year mortgage.
A 30-year mortgage is the most popular option due to its flexibility. When compared to a 15-year, a 30-year comes with a higher interest rate, which means you’ll pay more in interest over the loan term. Because of the extended term, though, your monthly mortgage payment will be lower and more manageable.
A 15-year mortgage might be better if you:
- Can afford the higher monthly payments, which will be double because your repayment timeline is cut in half.
- Want a lower interest rate. The lower interest rate associated with a 15-year mortgage, as opposed to a 30-year, saves you money over the life of the loan. In addition, you will only be paying interest for half the time of a 30-year mortgage.
- Are nearing retirement or otherwise want to pay off your mortgage. The reduced timeline of a 15-year mortgage can help to accelerate mortgage repayment.
A 30-year mortgage might be better if you:
- Want lower monthly payments. Stretching your loan repayment over a 30-year timeline can make the monthly installment payments far more affordable.
- Don't have immediate plans to move. If you intend to stay in the home for the long-term, a 30-year mortgage can make more sense.
- Seek long-term predictability. Locking in your mortgage payment and rate for 30 years can provide a measure of stability over the long-term, helping you budget for other life goals and weather times of economic turbulence or uncertainty.