The choice between a 15-year and a 30-year mortgage is a trade between two things you cannot have at once: a low monthly payment and a low lifetime cost. The calculator above puts both loans side by side on your own numbers.
Why the 15-year costs so much less in interest
Two forces cut the interest bill on a 15-year loan. The first is time: you borrow the same money for half as long, so interest has half as many months to accrue. The second is price: lenders usually quote the 15-year note 0.5 to 1.0 percentage point below the 30-year, because they get their money back sooner and carry less rate risk. Our defaults use Freddie Mac survey averages for the week of September 24, 2026: 6.42% against 7.03%, a 0.61-point spread.
On a $400,000 loan at those rates, the 15-year payment is $798 higher per month, and the total interest drops by $336,903. The amortization table shows why. In year one, the 30-year borrower pays about $27,991 in interest and repays only about $4,040 of principal. The 15-year borrower repays more than $16,000 of principal in the same year. That early principal is what builds equity fast and starves the loan of interest.
Who should choose the 15-year mortgage
The 15-year term fits borrowers whose income is stable and whose budget absorbs the higher payment with room to spare. A useful test is to add the full 15-year payment, taxes and insurance, and check that the total stays under about 28% of gross monthly income. You should still fund an emergency reserve of three to six months of expenses and keep contributing to retirement accounts.
It also fits people with a clear finish line. If you are in your forties or fifties and want the house paid off before you retire, a 15-year term enforces that plan. Finally, it suits borrowers who know they will not invest the difference. A forced saving plan that you follow beats a better plan that you do not.
Who should choose the 30-year mortgage
The 30-year term buys flexibility. The lower required payment protects you if income drops, a second child arrives, or a large repair lands in the same month as a job change. First-time buyers, single-income households, and people with variable pay such as commission or self-employment income often need that margin more than they need the interest savings.
The 30-year can also help you qualify for the home you need. Lenders size the loan on the required payment, so a lower payment means a higher approved amount. That help has a cost, though. A larger loan over a longer term costs far more interest, so use that room only when you need it.
The invest-the-difference trade-off
The strongest case for the 30-year is to take the lower payment and invest the monthly difference. At our defaults, you would invest $798 a month for 15 years. At year 15, the 15-year borrower owns the home outright, and the 30-year borrower still owes $296,419. The invested pot must grow faster than about 8.80% a year to exceed that balance.
That hurdle is higher than the 30-year rate, because the 15-year borrower also enjoys a lower rate. Long-run stock returns have beaten 9% in many periods, but not in every 15-year window. Your gains are also taxed unless they sit in a retirement account. The plan only works if the money is invested every month without fail. Treat the break-even figure as a guide, not a promise. If you doubt you can beat it after tax, the 15-year is the safer bet.
The middle path: a 30-year loan paid like a 15-year
You do not have to lock in the choice on day one. You can take a 30-year mortgage and make extra principal payments whenever cash allows. If you pay the 15-year amount every month, you will clear the loan in about 16 years at our default rates. The payoff takes longer than a true 15-year loan, because the 30-year rate is higher. In a tight month, you can fall back to the required payment. Check that your loan has no prepayment penalty, and ask your servicer to apply extra money to principal. A bi-weekly mortgage schedule is a gentler version of the same idea, adding one extra payment a year.
Refinancing is the other exit. Many borrowers start on a 30-year and refinance into a 15-year when their income rises or rates fall. Closing costs usually run 2% to 5% of the loan. Run the numbers in a refinance calculator before you commit, and make sure you will stay in the home long enough to recover those costs.
How to use this calculator well
Replace the default rates with real quotes from at least three lenders on the same day, because rates move daily and the spread varies. Enter your actual down payment, since a smaller loan narrows the dollar gap between the two payments. Add property tax and insurance to see the full monthly cost. Then compare the equity lines at year 5 and year 10 against your plans; if you may sell within five years, the gap matters less than your monthly cash flow. For a full month-by-month schedule on either term, open the amortization calculator, or size a single loan with the mortgage calculator.