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15 vs 30 Year Mortgage Calculator

Fifteen against thirty years, comparing the interest saved to what the payment difference would earn invested. The shorter loan always costs less interest and is not automatically the better decision.

Also called: 15 vs 30 year mortgage, shorter mortgage term.

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Interest saved by the 15-year
$255,518.35

$255,518.35 less interest on the 15-year, but the payment is $576.36 a month higher. At 7%, investing that difference for 30 years comes to $703,143.84, against $815,312.16 for the 15-year borrower investing the freed-up payment after year 15, so the shorter loan comes out ahead.

15-year payment
$2,572.27
30-year payment
$1,995.91
Monthly difference
$576.36
Total interest, 15-year
$163,008.35
Total interest, 30-year
$418,526.69
The difference, invested over 30 years
$703,143.84
The 15-year payment, invested after the loan clears
$815,312.16
Which comes out ahead
the shorter loan comes out ahead.
How this is calculated

An estimate, not an offer or a guarantee. Projected returns assume the rate you entered holds for the whole term, which no market does.

Method and background

This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for United States change on a published schedule; the effective date is shown on every rule-based tool.

How this is calculated

The fifteen-year loan carries a lower rate and a much higher payment, and saves a great deal of interest. The honest comparison is not interest against interest, it is interest saved against what the extra payment could have earned elsewhere over the same thirty years. Where the investment return exceeds the mortgage rate the longer loan wins on arithmetic, and where it does not the shorter one does. What the arithmetic cannot price is that the fifteen-year loan forces the saving.

both payments from the annuity formula, at their own rates and terms
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Loan amount (currency)
n
Months (months)

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

a typical rate spread

Loan amount
$300,000.00
Rate on the 15-year
6.25%
Rate on the 30-year
7%
Return if you invested the payment difference
7%

Interest saved by the 15-year$255,518.35

Both from the annuity formula, computed independently

Open this example

below the crossover the shorter loan wins on wealth, not only on interest

Loan amount
$300,000.00
Rate on the 15-year
6.25%
Rate on the 30-year
7%
Return if you invested the payment difference
7%

Interest saved by the 15-year$255,518.35

annuity of the freed 15-year payment over 180 months, against the difference over 360

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above the crossover investing the difference wins

Loan amount
$300,000.00
Rate on the 15-year
6.25%
Rate on the 30-year
7%
Return if you invested the payment difference
10%

Interest saved by the 15-year$255,518.35

same two annuities, three points higher

Open this example

the same rate on both still favours the shorter term on interest

Loan amount
$300,000.00
Rate on the 15-year
7%
Rate on the 30-year
7%
Return if you invested the payment difference
7%

Interest saved by the 15-year$233,159.43

boundary: the rate spread removed

Open this example

Written about this

Method and limits

What it assumes

  • The payment difference is genuinely invested every month for the full thirty years.
  • The investment return is after tax.

What it deliberately does not model

  • It ignores the value of being debt free at fifteen years, and the risk that comes with a higher committed payment.
  • Mortgage interest deductibility changes the comparison in markets that allow it.

Formula version 1.0.0 · definition 1.0.0 · United States · Report a problem with this calculator

Frequently asked questions

Is the 15-year always better?
On interest, always. On total wealth, only when your investment return is below the mortgage rate. And the invested difference only exists if you actually invest it, which most people do not.