Choosing between a 15-year and 30-year mortgage is one of the most important decisions in the home buying process. The difference in total cost can be staggering — but the right choice depends on your income, financial goals, and risk tolerance.
The tradeoff: A 15-year mortgage saves you a massive amount in interest but requires significantly higher monthly payments. A 30-year mortgage gives you flexibility and lower payments but costs far more over time.
The 15-year saves over $226,000 in interest — but requires $636 more per month. That's the core tradeoff.
A 15-year mortgage is the right choice if you have stable, high income and want to build equity faster, minimize total interest paid, and be mortgage-free sooner. Lenders also typically offer lower interest rates on 15-year loans — often 0.5%–0.75% lower than 30-year rates.
Your monthly payment won't exceed 28% of gross income. You have a solid emergency fund. You're closer to retirement and want to be debt-free. You prioritize long-term savings over short-term cash flow.
A 30-year mortgage makes sense when you need lower monthly payments to stay within budget, want flexibility to invest the difference, or are in an early career stage where income may grow significantly. The lower payment also provides a buffer for unexpected expenses.
The 15-year payment would stretch your budget too thin. You want to invest the payment difference in higher-return assets. You value financial flexibility. You're a first-time buyer with other competing financial priorities.
A popular strategy is getting a 30-year mortgage for the lower required payment, then voluntarily making extra principal payments when possible. This gives you the flexibility of a 30-year payment obligation but lets you pay it off faster when cash flow allows — without the commitment of a higher fixed 15-year payment.
Use our mortgage calculator to run the numbers for both 15 and 30 year terms with your actual home price and rate.
Try the Mortgage Calculator