15-Year vs. 30-Year Mortgage: How to Compare
Compare the payment, total-interest and flexibility tradeoffs between common 15-year and 30-year fixed mortgage terms.
The basic tradeoff
A 15-year mortgage repays principal much faster, which generally means a higher required monthly payment and less total interest. A 30-year mortgage spreads repayment over more months, generally lowering the required payment while increasing the amount of time interest can accrue.
Monthly affordability matters
The shorter term is not automatically better if the required payment leaves too little room for emergencies, retirement saving or other obligations. Compare the payment with your full housing budget, not simply the maximum amount a lender may approve.
Interest rates may differ
Lenders can price 15-year and 30-year loans differently. Compare actual quotes rather than assuming the same interest rate for both terms.
Flexibility versus forced payoff
A 30-year mortgage can provide a lower required payment while still allowing voluntary extra principal payments when permitted. A 15-year loan creates a higher mandatory payment, which can accelerate equity building but provides less monthly cash-flow flexibility.
Educational information only. This article is not individualized financial, investment, tax or legal advice and is not a lender or issuer offer. Review current disclosures from the relevant financial institution before making a decision.