15-Year vs 30-Year Mortgage: Which Should You Pick?

The 60-second answer

Take the 15-year if the payment fits your budget with room to spare: on a $400,000 home with $80,000 down, a 15-year at 5.5% costs $2,615 a month and $150,640 in total interest. Take the 30-year if the 15-year payment would stretch you: at 6.5% it costs $2,023 a month but $408,142 in total interest — a $592.05 monthly saving that costs you $257,502 in extra interest. If you take the 30-year, send extra principal whenever you can: it’s the flexible version of the 15-year. Run your own numbers in the 15-year vs 30-year mortgage calculator.

The math that matters: a worked $400,000 example

$400,000 price, $80,000 down (20%, no PMI), $320,000 financed:

• 15-year at 5.5%: $2,615/month × 180 payments = $470,640 total. Interest: $150,640.
• 30-year at 6.5%: $2,023/month × 360 payments = $728,142 total. Interest: $408,142.
• The difference: the 15-year costs $592.05 more per month and saves $257,502 in interest — about 63.1% of everything the 30-year borrower pays in interest. The 30-year borrower pays 2.7x the interest of the 15-year borrower.

Two engines drive that gap. First, the 15-year rate is lower (lenders risk less over 15 years). Second, the amortization is twice as fast — on the 15-year, roughly half of every early payment attacks principal; on the 30-year, early payments are mostly interest. Run the mortgage calculator on either term to see the amortization curve yourself.

The three questions that decide it

• 1. Does the 15-year payment fit the 28% rule? Keep total housing costs under 28% of gross monthly income. If the 15-year payment (plus tax, insurance, HOA) fits with a healthy emergency fund intact, the shorter term is a genuinely great deal. If it leaves you one car repair from panic, the 30-year is the right loan — a cheap mortgage you can’t pay is not cheap.
• 2. How long will you actually stay? The 15-year’s interest savings accrue over decades, but its equity advantage shows up fast: after five years the 15-year borrower has paid down far more principal. If you’ll sell in 5–7 years, the 30-year’s lower payment plus the equity you’d have built either way makes the flexibility nearly free.
• 3. What would the monthly difference do elsewhere? The 30-year frees up $592.05 a month in this example. Invested at market returns, that can beat the guaranteed interest savings — if you actually invest it. Be honest about which person you are: the investor, or the person whose “investing” becomes lifestyle spending. The 15-year is forced savings with a guaranteed return.

The 30-year + extra payments hack

Want the 15-year’s savings with the 30-year’s safety net? Take the 30-year and pay it like a 15-year: send the $592.05 monthly difference as extra principal whenever you can. You kill nearly the same interest, keep the lower required payment for hard months, and skip the 15-year’s stricter income qualification. Two catches: the 30-year rate is higher, so the DIY version costs slightly more in interest — and it only works if you actually send the extra. Automate it on day one or it won’t happen. The biweekly mortgage calculator shows another flavor of the same trick.

When the 30-year wins outright

• Your income is variable: freelancers and commission earners should buy the lower required payment and overpay in good months.
• You’re early in your career: income will likely rise; a 30-year you refinance or overpay later beats a 15-year that starves your 401(k) now.
• You itemize and value the deduction: mortgage interest is deductible for itemizers — it softens, but never erases, the 30-year’s cost.

Three mistakes people make

• Mistake 1: Comparing payments instead of total cost. “Only $592.05 more a month” sounds small; $257,502 in interest is the number that matters. Always compare total interest, not just the monthly line.
• Mistake 2: Forgetting tax, insurance, and HOA. Those ride on top of both payments identically — budget the all-in number against the 28% rule, not the P&I the calculator shows.
• Mistake 3: Taking the 15-year and then cashing out equity later. A 15-year followed by a HELOC or cash-out refinance in year 8 destroys the entire point. If your life needs that flexibility, start with the 30-year.

The bottom line

The 15-year is the best loan: less interest, faster equity, forced discipline. The 30-year is the best option: a lower required payment you can always overpay. Choose the 15-year when the payment is comfortable; choose the 30-year when flexibility has real value — and if you take the 30-year, automate the extra principal on day one. Either way, run the 15-year vs 30-year calculator with your actual quotes before you sign.