15-Year vs 30-Year Mortgage: What the Shorter Term Really Saves

Most comparisons quote one rate for both terms and a lifetime saving few people stay long enough to collect. Enter your loan and both rates to see what the 15-year saves by the year you actually expect to move — and what it costs to take the 30-year and pay it like a 15 instead.

The 15-year saves you, if you keep it all fifteen years$312,283In interest, for a payment $793/mo higher. Sell or refinance in year 7 and the saving so far is $39,904, with $106,547 more equity built.

The loan and the two rates

Loan Amount

30-Year Rate

15-Year Rate

Loan Start Date

If You Sell or Refinance In

yrs

The 15-year rate here is 0.75 points below the 30-year. A 15-year note is normally priced lower because the lender's money is out for half as long; the defaults are an editorial estimate of today's market, so replace both with the rates you have actually been quoted.

The loan starts in Oct 2026, with the first payment a month later; the sell-or-refinance year counts from the start.

Principal and interest only. Tax and insurance are the same whichever term you pick, so they do not change the comparison — but they do change what you can afford.

	15-year	30-year	30-year paid as 15
Rate	5.75%	6.50%	6.50%
Monthly payment	$3,322	$2,528	$3,322
Paid off	Oct 2041	Oct 2056	Feb 2043
Time to pay off	15 yr	30 yr	16 yr 4 mo
Total interest	$197,895	$510,178	$249,555
Total paid	$597,895	$910,178	$649,555
Interest as a share of the loan	49%	128%	62%

15-year

30-year

30-year paid as 15

Rate

5.75%

6.50%

Monthly payment

$3,322

$2,528

$3,322

Paid off

Oct 2041

Oct 2056

Feb 2043

Time to pay off

15 yr

30 yr

16 yr 4 mo

Total interest

$197,895

$510,178

$249,555

Total paid

$597,895

$910,178

$649,555

Interest as a share of the loan

49%

128%

62%

The option most comparisons leave out

You do not have to choose a 15-year note to pay a loan off in about fifteen years. Take the 30-year and pay it at the 15-year amount, $3,322 a month, and it is gone in Feb 2043 — 16 months after the real 15-year would be.

It costs $51,660 more in interest than the 15-year, because the whole balance carries the 30-year rate. That is the price of being able to drop back to $2,528 a month if your income falls — a fallback the 15-year does not give you, since its higher payment is the required one.

If you sell or refinance in year 7

	15-year	30-year	30-year paid as 15
Interest paid by then	$134,135	$174,040	$156,575
Still owed	$255,118	$361,665	$277,557
Equity built by payments	$144,882	$38,335	$122,443

The $312,283 lifetime saving assumes you keep the loan to the end. Leave in year 7 and the 15-year has saved you $39,904 in interest so far — 13% of the headline. It has also built $106,547 more equity, which comes back to you when you sell and is the bigger effect at this horizon.

Why the two rates differ

A lender who gets its money back in fifteen years carries half the exposure to rates moving against it, so 15-year notes are priced below 30-year ones — usually by somewhere around half a point to a point. Comparisons that quote one rate for both terms are making the most common mistake in this decision: the spread is a large part of why the 15-year wins on interest, and leaving it out understates the gap.

The number that actually applies to you

Lifetime interest savings are the figure everyone quotes, and they assume you hold the loan for its whole term. Most people sell or refinance well before that, and what matters then is the interest you have paid by the time you leave and the equity you take with you. That is why this page asks when you expect to move, and why the early-exit figures above are the honest version of the headline.

Can you carry the higher payment?

The 15-year payment is the reason most buyers cannot choose it, even when the arithmetic favours it. Neither payment here is the whole monthly cost — for that, with property tax, insurance and PMI, run the loan through the mortgage calculator. If you already have a loan and want to pay it down faster, the prepayment calculator applies the same idea to the balance you have, and the loan comparison tool handles any two offers, not just these two terms.

What this page assumes

Figures are estimates for planning, not a loan offer. Only principal and interest are compared. Investing the payment difference instead is not modelled — it is the strongest argument for the 30-year, and doing it honestly needs a return assumption and a tax treatment this page does not make. Both rates are fixed for the full term and are editorial defaults, not quotes. A lender may not approve the 15-year payment under its debt-to-income test even when the 30-year qualifies. Equity here is what your payments have built; any change in the home's value is not included. Taxes are out of scope, and the rent vs buy calculator shows why the mortgage interest deduction is worth nothing to most filers anyway. Confirm anything consequential with your lender.