One costs $245,000 less. The other one you will actually stick with. The honest comparison, with real numbers.
Take a $320,000 loan. A 30-year fixed at 6.5% costs about $2,023 a month and $408,000 in total interest. A 15-year fixed — which typically prices about half a point lower, say 5.9% — costs about $2,683 a month and $163,000 in total interest.
That's the whole trade in one sentence: $660 more per month buys you $245,000 less interest and a paid-off house in half the time. Neither side is "right" — they're different bets on your future cash flow. Model your own numbers in the mortgage calculator.
Beyond the obvious interest savings, 15-year loans carry lower rates (lenders take less duration risk), build equity roughly three times faster in the early years, and impose discipline no budget app can match. If your income is stable, your emergency fund is real, and the higher payment still passes the 28/36 test, the 15-year is the cheaper house by a wide margin.
The 30-year's superpower is flexibility. The lower required payment is what you owe in a bad month; nothing stops you from paying more in good months. A 30-year loan paid on a 15-year schedule finishes almost as fast — you just paid a slightly higher rate for the right to slow down whenever life demands it.
That right isn't free: the rate premium plus human nature (most people don't actually keep up the extra payments) is why the 30-year usually ends up costing more in practice. If you take this path, automate it — set the extra amount to transfer the day after payday, and check what it saves with the extra payment calculator.
Ask one question: what happens to the $660 difference if you don't send it to the mortgage? If the honest answer is "it gets invested every month, automatically," the 30-year plus investing can beat the 15-year mathematically. If the honest answer is "it gets absorbed into life," the 15-year quietly saves you a quarter of a million dollars. Choose based on the person you actually are, not the person the spreadsheet assumes.
Already have a loan and want out faster? The loan payoff calculator shows your debt-free date with any extra payment.
What about a 20-year loan?
The overlooked middle ground: a payment between the two and a rate usually a touch under the 30-year's. If the 15-year feels one stretch too far, price a 20 before giving up on the idea entirely.
Does a 30-year help me qualify for a bigger loan?
Yes — the lower required payment lowers your debt-to-income ratio, which is exactly why lenders quote it by default. Just remember that qualifying for more house is not a reason to buy more house — the 28/36 rule is about your budget, not the bank's ceiling.
Can I start with a 30 and switch to a 15 later?
Formally switching means refinancing — new closing costs and whatever rates are doing that year. Informally, you can pay a 30 on a 15-year schedule starting any month, no paperwork, as covered above. The formal refi only wins if rates have dropped enough to beat the fees.
Is the 15-year rate always lower?
Typically about half a point, sometimes more, but pricing varies by lender and day. Get both quotes from the same lender on the same day — that's the only spread that's real for you.
🤝 No signup. No spam. Nothing here tries to sell you a loan.