15-Year vs. 30-Year Mortgage: Payments, Interest and Which to Choose

A 15-year mortgage has a payment roughly a third higher than a 30-year mortgage but costs less than half the total interest, because you borrow for half as long and usually at a lower rate. On a $320,000 loan, a 30-year at 6.5% costs $2,022.62 a month and $408,142 in interest; a 15-year at 5.75% costs $2,657.31 a month and only $158,316 in interest. The right choice depends on whether the higher payment fits comfortably, what else you would do with the difference and how much flexibility you need.

Side-by-side comparison

$320,000 loan, fixed rates, principal and interest only:

The 15-year loan saves about $249,800 in interest. Even after 15 years, the 30-year borrower still owes $232,189, about 73% of the original loan.

Both payments come from the standard formula:

with i the monthly rate and n the number of months. The mortgage calculator shows the payment with taxes and insurance added, and the loan payment table lays out payments across many rates and terms at once.

Where the savings come from

Two forces work together:

1. Fewer years of interest. Even at the same 6.5% rate, a 15-year loan would cost $2,787.54 a month and $181,758 in interest, saving $226,385 compared with the 30-year.
2. A lower rate. Lenders typically price 15-year loans about 0.5 to 1 percentage point below 30-year loans. In this example, the lower rate saves another $23,442 and lowers the payment by $130.

The shorter term also changes how fast you build equity. The first 15-year payment puts $1,123.98 toward principal and $1,533.33 toward interest, but principal becomes the larger share at payment 36, three years in. On the 30-year loan at 6.5%, the first payment puts only $289.28 toward principal, and interest stays the larger share for more than 18 years. Compare the full schedules with the amortization calculator, or read how to read an amortization schedule.

The case for the 30-year loan

The lower required payment is flexibility, and flexibility has value:

• Cash-flow cushion. If income drops, you only owe $2,023 a month, not $2,657.
• Qualifying for the home you want. At the same debt-to-income limit, the lower payment supports a larger loan; see how to calculate debt-to-income ratio.
• Other priorities first. An emergency fund, a 401(k) match and paying off high-interest debt usually beat extra mortgage principal.
• Prepay when you choose. Most US mortgages have no prepayment penalty, so you can pay extra in good months and stop in lean ones.

Paying a 30-year like a 15-year

If you pay the 15-year payment of $2,657.31 on the 30-year loan at 6.5%, the loan is paid off in 196 months (about 16 years and 4 months) with $199,644 of total interest. That is about $41,300 more than the true 15-year loan, because the rate is higher, but $208,500 less than the standard 30-year schedule, and you keep the right to fall back to the lower payment. The guide on how much extra mortgage payments save shows smaller extra amounts too.

The invest-the-difference argument

Some borrowers take the 30-year and invest the $635 monthly difference. To compare fairly, assume both households spend $2,657.31 a month on mortgage plus investing for 30 years:

• 15-year household: pays the mortgage for 15 years, then invests $2,657.31 a month for the next 15 years.
• 30-year household: pays $2,022.62 for 30 years and invests $634.69 a month the whole time.

The 30-year strategy only comes out ahead if investments earn more than about 7.75% a year before taxes, and it requires the discipline to invest every month for 30 years. The guaranteed “return” of paying down a 5.75% to 6.5% mortgage is hard to beat on a risk-adjusted basis, though the invested money is more accessible in an emergency than home equity. Taxes, the mortgage interest deduction (only if you itemize) and investment fees all shift the break-even point.

Does the mortgage interest deduction change the math?

Less than many people assume. Mortgage interest is deductible only if you itemize, and the 2026 standard deduction is $32,200 for married couples filing jointly and $16,100 for single filers. Interest on the 30-year loan in this example is about $20,700 in the first year, so a couple with modest other deductions might get little or no benefit from it. Even when you do itemize, the deduction returns only your marginal rate on each interest dollar: at 22%, $1 of interest still costs you 78 cents. Paying more interest to save tax is never a winning strategy on its own.

Questions that decide it

1. Would the 15-year payment exceed about 28% of gross income once taxes and insurance are added? If so, the 30-year is probably the safer choice.
2. Do you have three to six months of expenses saved? Home equity is hard to tap in a crisis.
3. Are you capturing your full 401(k) match and free of credit card debt? Those come first.
4. How long will you stay? If you will likely sell within 7 years, the interest difference is smaller than the full-term tables suggest.
5. When do you want to be debt-free? Owning the home outright before retirement lowers the income you will need later.

Other terms to consider

• 20-year and 10-year fixed loans split the difference or go further.
• Adjustable-rate mortgages start lower but can reset higher after the initial period.
• Refinancing later from a 30-year to a 15-year can work when rates fall; the refinance calculator finds the break-even on closing costs.

These figures are illustrations for education, not financial advice or rate quotes. Your actual rate, payment and qualification depend on your credit, down payment and lender; request Loan Estimates for both terms to compare.