Mortgage Calculator15 vs 30 Year Mortgage: Which Costs Less?
A 15-year mortgage has a higher monthly payment but much less total interest. A 30-year mortgage has a lower monthly payment and costs more over time. Here's a worked example.
Example: $320,000 loan at 6.5%
| 15-year | 30-year | |
|---|---|---|
| Monthly principal and interest | $2,787.54 | $2,022.62 |
| Total interest over the loan | $181,758 | $408,142 |
The 15-year loan costs about $765 more per month but saves about $226,000 in interest. Your own rate and fees will change these numbers.
Which should you choose?
Choose a 15-year loan if you can comfortably afford the higher payment and want to pay off the home sooner. Choose a 30-year loan if you need the lower monthly payment or want to keep cash available for other goals. A 30-year loan lets you make extra payments when you can, while still keeping the required payment low.