Mortgages guide
15-Year vs. 30-Year Mortgage: Payment and Interest
A 15-year mortgage usually requires a higher monthly principal-and-interest payment than a 30-year loan with the same balance and rate, but it schedules fewer payments and typically less total interest. Compare actual written offers: rates, fees, taxes, insurance, and your cash-flow needs can change the decision.
Why the terms behave differently
The same principal is repaid over 180 monthly payments on a 15-year term versus 360 on a 30-year term. A shorter schedule allocates more principal to each payment. It can also carry a different quoted rate, so a fair comparison uses the actual terms offered rather than assuming rates are identical.
Illustrative $300,000 comparison
Assume both fixed-rate loans are $300,000 at 6% nominal APR, with monthly payments and no fees. The 15-year principal-and-interest payment is about $2,531.57, with about $155,683 total interest across 180 payments. The 30-year payment is about $1,798.65, with about $347,515 interest across 360 payments. The 15-year payment is about $732.92 higher each month in this hypothetical comparison.
What the comparison leaves out
Property taxes, homeowners insurance, mortgage insurance, HOA charges, closing costs, and maintenance are not included in those payment figures. Real lenders may quote different rates and fees by term. The example holds the rate constant to isolate the term effect; it is not a rate quote or prediction.
Compare affordability and flexibility
A lower required payment can leave more room in a monthly budget, while a shorter term can reduce scheduled interest. Consider income stability, emergency savings, retirement contributions, and other high-rate debt. If a 30-year loan permits extra principal without a penalty, optional prepayments may offer flexibility, but confirm the contract and payment application with the servicer.
How to evaluate real offers
Request comparable Loan Estimates and line up the loan amount, interest rate, term, points, lender fees, and projected cash to close. Compare the monthly principal-and-interest payment and the total scheduled payments, then add estimated housing costs. Do not select a term from the payment alone.
| Term | Monthly payment | Scheduled interest |
|---|---|---|
| 15 years | $2,531.57 | About $155,683 |
| 30 years | $1,798.65 | About $347,515 |
Frequently asked questions
Does a 15-year mortgage always have a lower rate?
Not necessarily. Compare actual lender offers and their points and fees.
Can I make extra payments on a 30-year mortgage?
Check your loan terms and servicer instructions; verify extra funds are applied to principal and review any applicable prepayment terms.
Sources and further reading
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Use the Mortgage Calculator to explore your own numbers with the assumptions shown in the tool.
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Educational content only; not individualized financial, tax, or legal advice.