30-Year vs 15-Year Mortgage Comparison
Compare a 30-year and 15-year fixed-rate mortgage for the same loan amount. See which option saves more in total interest and what extra monthly payment it costs you.
30-Year vs 15-Year: The Math
The 15-year mortgage costs roughly half the interest of a 30-year for the same loan amount. On a $350,000 loan at typical May 2026 rates (6.85% 30-year, 5.95% 15-year per Freddie Mac PMMS), the 30-year pays approximately $475,000 in lifetime interest vs $180,000 on the 15-year — a difference of $295,000.
The catch: 15-year monthly payments are 40-50% higher. For the same $350,000 loan, the 15-year payment is roughly $2,950 vs $2,300 for the 30-year — a $650/month difference. That cash difference is the real decision point: can you afford the higher payment, and would that money work harder invested elsewhere? Source: Freddie Mac Primary Mortgage Market Survey. Last updated: May 2026.
When the 15-Year Makes Sense
Choose 15-year if (1) you have 15-20 years until retirement and want a debt-free home before retirement income drops, (2) your income is stable and well above the 15-year payment plus 28% of gross — your housing-debt ratio remains comfortable, (3) you're in a lower tax bracket where the mortgage interest deduction has limited value, and (4) you're confident you won't move within 7-10 years (otherwise the rate-spread advantage is lost).
When the 30-Year Wins
Choose 30-year if (1) you're younger and the payment difference invested in an S&P 500 index fund or 401(k) match historically beats the 0.75-1.00% rate gap, (2) you value cash flow flexibility for emergencies or business opportunities, or (3) you want the option to make extra principal payments voluntarily (most 30-year loans allow this — effectively giving you 15-year payoff timing at 30-year flexibility). The Federal Reserve consistently shows lower default rates on 30-year loans because monthly payment shock is lower (federalreserve.gov data).
Hybrid Strategy: 30-Year With Extra Principal
The optimal approach for most disciplined borrowers is a 30-year loan with voluntary extra principal payments equal to a 15-year payment. This achieves 15-year payoff timing without locking you into the higher minimum payment — if your income temporarily drops, you fall back to the smaller required payment without restructuring the loan. Run this calculator against the extra-payment calculator to compare exact savings.