30 vs 15-Year Mortgage Calculator
Compare monthly payments, total interest, and see whether investing the difference beats the 15-year's interest savings.
Loan Details
Investment Comparison
What if you took the 30-year loan and invested the monthly savings instead? See whether compounding beats the 15-year's guaranteed interest savings.
S&P 500 averages ~7% after inflation.
| 30-Year | 15-Year | |
|---|---|---|
| Rate | — | — |
| P & I | — | — |
| 30-Year | 15-Year | |
|---|---|---|
| Total Interest | — | — |
| Total Cost | — | — |
| Interest Saved | — | — |
Amortization Schedule
How This Comparison Works #
This calculator runs two full mortgage calculations side by side using different rates for each term. That matters because 15-year mortgages carry lower rates than 30-year loans — typically 0.5 to 0.75 percentage points lower. The rate difference amplifies the savings beyond just halving the repayment period: every dollar of principal accrues less interest from day one.
Both terms include property tax, homeowner's insurance, and PMI (if your down payment is below 20%). The "Total Cost" section shows cumulative interest over the full life of each loan, so you can see the true price of stretching payments over 30 years versus paying them off in 15.
The Investment Crossover section answers the natural follow-up: both borrowers can invest — the 30-year borrower invests the monthly savings from day one, while the 15-year borrower invests their entire freed payment after month 180. The chart tracks both investment accounts over 30 years. The crossover point shows when the 15-year strategy overtakes the 30-year strategy, and the verdict tells you which ends up ahead.
When to Choose 15-Year vs 30-Year #
The 15-year mortgage is the better financial outcome if you can comfortably afford the higher payment. On a $320,000 loan, the 15-year payment is typically $700 to $900 more per month than the 30-year — but you save $150,000 to $250,000 in total interest and own your home free and clear in half the time. The interest savings are guaranteed, locked in the day you close.
The 30-year mortgage makes sense when cash flow flexibility matters more than total cost. The lower required payment gives you room to handle emergencies, job changes, or other expenses without defaulting. You can always make extra payments toward a 30-year loan to pay it off faster, though you'll still pay the higher rate on every dollar.
There's a middle path worth considering: take the 30-year for flexibility but commit to investing the difference systematically. If your investment returns exceed your mortgage rate, you can come out ahead financially — though it requires discipline, and the returns are never guaranteed.
Another option: take the 30-year mortgage and make extra payments or switch to biweekly payments to accelerate payoff without locking into the higher required payment. You won't save as much as a true 15-year mortgage (because you're still paying the higher 30-year rate), but you keep the flexibility to scale back if money gets tight.
The Investment Argument #
The "invest the difference" strategy relies on compound growth. If you take the 30-year loan and invest the $700–$900/month you'd otherwise send to the 15-year payment, that money compounds over decades. At 7% average annual returns (the S&P 500's historical inflation-adjusted average), the investment portfolio can grow to $250,000–$400,000 by year 30 — often exceeding the 15-year's interest savings.
But the comparison isn't apples to apples. Mortgage interest savings are guaranteed and risk-free — you lock them in at closing. Investment returns are volatile: some years you'll earn 20%, other years you'll lose 15%. Taxes on investment gains reduce the effective return. And the strategy only works if you actually invest every month without exception — many people who plan to invest the difference end up spending it instead. Use this calculator's breakeven analysis to see how sensitive the outcome is to your assumed return rate, and be honest about your risk tolerance.
Frequently Asked Questions #
How much do you save with a 15-year vs 30-year mortgage?
On a $320,000 loan at typical rates, a 15-year mortgage saves $150,000 to $250,000 in total interest compared to a 30-year. The exact savings depend on the rate difference between the two terms — 15-year rates are typically 0.5 to 0.75% lower than 30-year rates, which amplifies the savings beyond just the shorter repayment period.
Why are 15-year mortgage rates lower than 30-year rates?
Lenders charge lower rates for 15-year mortgages because they carry less risk. The shorter term means less exposure to economic changes, interest rate fluctuations, and borrower default. Lenders also get their capital back faster, reducing their opportunity cost. The rate difference is typically 0.5 to 0.75 percentage points.
Can you pay off a 30-year mortgage in 15 years with extra payments?
Yes, but you won't save as much as taking a 15-year mortgage. With a 30-year loan at 6.5%, you'd need to pay about $750 extra per month to pay it off in 15 years — but you'd still pay the higher 6.5% rate on every dollar. A 15-year mortgage at 6.0% saves more because the lower rate reduces the interest on every payment from day one. The 30-year with extra payments does offer flexibility — you can skip the extra payments if money gets tight.
Is it better to invest the difference or take the 15-year mortgage?
It depends on the expected investment return. If you can consistently earn more than your mortgage rate after taxes, investing the difference with a 30-year loan mathematically wins. At 7% average stock market returns, the 30-year plus investing often comes out ahead over 30 years. However, the 15-year mortgage offers a guaranteed return equal to your interest rate, while investment returns are uncertain. Risk tolerance and discipline matter as much as the math.
What investment return rate should I use for the comparison?
The S&P 500 has historically averaged about 10% annually before inflation, or roughly 7% after inflation. For a conservative comparison, use 6-7%. For an aggressive estimate, use 8-10%. Remember that investment returns are not guaranteed and vary significantly year to year — mortgage interest savings are locked in from day one.