15-Year vs 30-Year Mortgage
Compare 15-year and 30-year mortgages — total interest, payment size, and which makes financial sense.
Overview
A 15-year mortgage has a roughly 50% higher monthly payment but pays off the loan in half the time and saves hundreds of thousands in interest. A 30-year mortgage is cheaper monthly and frees up cash flow for investing — which often comes out ahead mathematically.
Choose 15-Year Mortgage when...
Choose a 15-year if you want forced equity build-up, are within 15 years of retirement, or strongly value being debt-free.
Choose 30-Year Mortgage when...
Choose a 30-year for cash-flow flexibility — and either prepay the difference or invest it. Most buyers should default here.
Our Verdict
Mathematically, the 30-year mortgage with disciplined investing of the payment difference often beats the 15-year over a long horizon — equity markets historically return more than mortgage rates. Behaviorally, the 15-year forces savings and is psychologically liberating once paid off. The right answer depends on your discipline and how much risk you want around retirement.
Frequently Asked Questions
What is the difference between 15-Year Mortgage and 30-Year Mortgage?
A 15-year mortgage has a roughly 50% higher monthly payment but pays off the loan in half the time and saves hundreds of thousands in interest. A 30-year mortgage is cheaper monthly and frees up cash flow for investing — which often comes out ahead mathematically.
When should I choose 15-Year Mortgage over 30-Year Mortgage?
Choose a 15-year if you want forced equity build-up, are within 15 years of retirement, or strongly value being debt-free.
When should I choose 30-Year Mortgage over 15-Year Mortgage?
Choose a 30-year for cash-flow flexibility — and either prepay the difference or invest it. Most buyers should default here.
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