The choice between a 15-year and 30-year mortgage comes down to one tradeoff: lower monthly payment vs. dramatically less total interest. A 15-year mortgage typically carries a rate 0.5–0.75% lower than a 30-year, and you build equity twice as fast — but your monthly payment is roughly 40–50% higher. Use the calculator below to see both scenarios side by side for your home price.
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A 15-year mortgage saves a large amount in total interest — on a $320,000 loan, roughly $264,600 less. But "better" depends on your situation. If the higher payment strains your budget or prevents you from contributing to retirement accounts or an emergency fund, the 30-year with voluntary extra payments may be the smarter choice.
What is the rate difference between 15 and 30-year mortgages?
Historically, 15-year rates run 0.5–0.75% below 30-year rates. This is because shorter-term loans are less risky for lenders. In 2024–2025, the spread has been closer to 0.5%.
Can I get the benefits of a 15-year by paying extra on a 30-year?
Yes — making extra principal payments on a 30-year gives you flexibility the 15-year doesn't. If money is tight one month, you can pay only the minimum. The downside: the 30-year rate is higher, so you're paying more interest on the balance even if you pay it off in 15 years. The math slightly favors the actual 15-year, but the flexibility of the 30-year has real value.
Which term should first-time buyers choose?
Most first-time buyers choose the 30-year for lower payments and flexibility, especially when buying near the top of their budget. As income grows and the home appreciates, many refinance into a 15-year or simply accelerate payments. There's no shame in starting with the 30-year — it's the right call for most buyers.
Does the term affect my ability to qualify?
Yes. Lenders qualify you based on the monthly payment, not the loan amount. A 15-year mortgage on $400,000 might be $1,500/month more than a 30-year — meaning you need significantly more income to qualify for the same loan amount on a 15-year term.