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15-Year vs. 30-Year Mortgage Calculator and Guide

NerdWallet's 15- vs. 30-year mortgage calculator allows you to compare costs, weigh pros and cons, and decide which loan term is right for you.

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What's the difference between a 15-year and 30-year mortgage?

The biggest differences between a 15- and 30-year mortgage are the interest rates, term lengths and monthly payments.

  • Term lengths: A 15-year mortgage is designed to be paid off over 15 years, while a 30-year mortgage is designed to be paid off in 30. 

  • Interest rates: The interest rate is typically lower on a 15-year mortgage than a 30-year one as the lender is taking on less risk. And, because the term is half as long, you'll pay less interest over the life of the loan. 

  • Monthly payment: The monthly payment on a 30-year mortgage will be lower than with a 15-year mortgage, as the loan is spread out over a longer period of time.

Did you know? Even if your mortgage payment is fixed, your costs for property taxes and home insurance can increase, driving up your monthly outgoings. Be sure to calculate all costs associated with homeownership before buying a property.

» MORE: Adjustable-rate vs. fixed-rate mortgages

What is a 15-year mortgage?

A 15-year mortgage refers to a home loan that’s scheduled to be paid off in 15 years if you make all the payments on time. These mortgages typically have a fixed rate, which keeps the interest rate the same for as long as you hold the mortgage.

15-year mortgages are less common than 30-year mortgages, partly because the monthly payments on 15-year loans are higher. However, the interest rates for 15-year mortgages are typically lower than their 30-year counterparts due to the lower risk to lenders.

Pros and cons of a 15-year mortgage

Build equity faster

A 15-year fixed-rate mortgage, with its lower interest rate and higher monthly payment, builds home equity faster because you pay down the principal balance quicker.

Shorter path to full homeownership

Paying off your mortgage and owning a home free and clear is a goal that burns bright for many people. A shorter mortgage term can mean reaching that goal sooner.

Long-term savings

Lenders are exposed to fewer years of risk on a 15-year mortgage, so they charge a lower interest rate. Half as many years of payments also means you pay half as many years of interest. Let’s compare the principal and interest — not including homeowners insurance, property tax or private mortgage insurance — for a $300,000 mortgage:

  • A 30-year fixed-rate mortgage at 7% has monthly payments of $1,996 and a total interest cost of $418,528 over the life of the loan.

  • A 15-year fixed-rate mortgage at 6.25% has monthly payments of $2,572 and a total interest cost of $163,009 over the life of the loan.

The 15-year loan costs $255,519 less in interest.

Larger monthly payments

Monthly principal and interest payments for a 15-year fixed-rate mortgage run about 30% higher than on a 30-year home loan. You also have to pay property taxes, insurance and, if you put less than 20% down, mortgage insurance. This could make it hard to respond to emergencies and other financial needs that arise during the term of the loan. Even if numbers seem doable now, a mortgage is a long-term commitment. The only way to get out is by selling, refinancing or foreclosing.

Tighter home budget

The higher monthly payments mean you’ll qualify for a lesser amount, as your debt-to-income ratio (DTI) will be higher. This might mean buying a smaller house or forgoing your dream neighborhood. Stretching the loan over 30 years and keeping your payments low could give you more choices.

Higher qualification barriers

Higher monthly payments (and subsequently higher DTI) can make it harder to qualify for 15-year loans. Be sure to have a detailed grasp of how much house you can afford before you start the process.

🤓Nerdy Tip

If you're unsure that you'll always be able to make bigger payments, choose a mortgage with a longer term, then pay extra toward the principal each month. That way, you're still paying down the mortgage more quickly, but you aren't in hot water if there's a month where you can afford only the minimum payment.

» MORE:Calculate the impact of biweekly payments

What is a 30-year mortgage?

A 30-year mortgage refers to a home loan that’s scheduled to be paid off in 30 years if you make every payment on time. 30-year mortgages are more popular, with nearly nine out of every 10 home buyers choosing this type of loan, according to 2024 data collected by homebuyer.com.

Most 30-year mortgages have a fixed rate, meaning that the interest rate and the payments stay the same for the life of the mortgage.

Pros and cons of a 30-year mortgage

Lower payment

A 30-year term allows for a more affordable monthly payment by stretching out the repayment of the loan over a longer period.

Flexibility

You can pay off the loan faster by adding to your monthly payment or making extra payments. This approach reduces interest over time, while still giving you the flexibility to fall back on the smaller payment as needed.

More house for the mortgage

Lower payments mean you could qualify for a more expensive home, as your debt-to-income ratio will be lower.

Bigger tax deduction

Current tax laws let home buyers deduct mortgage interest from their taxes. In the early years of a loan, most of your mortgage payments go toward paying off interest, making for a meaty tax deduction at the beginning.

Higher rates

Lenders tend to charge higher interest rates on longer loans because the risk of not getting repaid increases over time.

More interest paid

Even though monthly payments are lower on a 30-year loan, you can end up paying significantly more in interest over the life of the mortgage.

Slower equity growth

It takes longer to build an equity share in a home because a larger portion of your early payments goes toward interest rather than principal.

Danger of overborrowing

Qualifying for a bigger mortgage can tempt some people to get a bigger home that's harder to afford over time. Pricier homes typically come with steeper property taxes, insurance premiums and even utility bills. Remember to leave a cushion for life’s inevitable surprises. A good rule of thumb is to budget 1% to 4% of the purchase price for upkeep.

Use the above calculator to compare costs, monthly payments, and payoff timelines, helping you decide which loan term is right for you.

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