FREE CALCULATOR · MONEY
Put two loan terms head to head — monthly payment, total interest, and payoff date for each — and see exactly what the shorter term really saves you.
Enter the loan once, then pick two term lengths. The chart shows how each term eats into the balance over time.
A shorter term does two things at once: it raises the monthly payment, and it slashes the number of months the lender can charge you interest. The payment goes up because you are squeezing the same balance into fewer installments; the interest collapses because the balance drops fast instead of lingering for decades.
Run that formula twice — once per term — and subtract. The difference in total interest is the price of the extra years, and the difference in monthly payment is what those years cost you in cash flow.
A 30-year term gives a $1,945.79 monthly payment and $400,486 of total interest — the loan costs $700,486 all in. A 15-year term on the same loan asks $2,654.73 a month ($708.93 more) but only $177,851 in total interest. The shorter term saves $222,635 in interest and the loan is paid off 15 years sooner. That is the whole trade: roughly $709 a month buys back $222,635 and 180 months of payments.
Interest is charged on the balance you still owe, every single month. On a long term the balance stays high for years — in the example above, the 30-year loan still owes most of the principal after a decade, while the 15-year loan is nearly half paid. Fewer months of interest on a shrinking balance is what produces the huge difference.
Not always. The 15-year term demands a much bigger payment, which leaves less room for emergencies, investing, or other goals. A 15-year term is usually the better deal on interest, but only if the payment is comfortable — a payment that strains your budget is its own risk. Compare the two loan payments first, then decide.
Yes — this is the "best of both" move. Paying extra on a 30-year loan shortens it and cuts the interest, while the required payment stays low if money gets tight. Use the extra loan payment calculator to see exactly how many years an extra monthly amount buys back.
In reality, no — lenders usually quote shorter terms at a lower rate. This calculator assumes one APR for both so the comparison is apples to apples; if you have real quotes, enter the shorter term's actual rate mentally or run each term through the loan payment calculator separately with its own rate.
No — the numbers cover principal and interest only, which is the part the term length controls. Tax and insurance are paid either way and don't change with the term, so leaving them out keeps the comparison fair.
Take the longer term and treat the shorter term's payment as a target: pay extra when you can. You keep the flexibility of the lower required payment while still chipping away at the interest. Just make sure the extra money is applied to the principal — ask your servicer for a "principal-only" payment.
Compare the interest you would save over the remaining life of both options, then subtract the refinance closing costs — usually 2–5% of the loan. Refinancing only wins if the savings clearly beat the fees, and if the new higher payment fits your budget with room to spare.