15-Year vs. 30-Year Mortgage: Which One Costs Less?
Updated November 8, 2026
The choice between a 15-year and a 30-year mortgage comes down to a trade-off: a lower monthly payment or a much lower total cost. The difference is larger than most people expect.
The numbers side by side
Take a $320,000 loan. Shorter loans usually come with lower rates, so this example assumes 6.5% for 30 years and 5.875% for 15 years. Actual rates will differ.
| 30-year at 6.5% | 15-year at 5.875% | |
|---|---|---|
| Monthly principal & interest | $2,023 | $2,679 |
| Total interest | $408,142 | $162,180 |
| Paid off after | 30 years | 15 years |
In this example, the 15-year loan costs about $656 more per month but saves about $245,962 in interest.
Why the 15-year loan saves so much
Two things work together. You owe money for half as long, and you usually pay a lower rate. In the early years of a 30-year loan, most of each payment goes to interest. On a 15-year loan, a larger share goes to principal from the first payment, so equity builds much faster.
Why many people still pick 30 years
- Lower required payment. It is easier to qualify for, and easier to keep up with if your income drops.
- Flexibility. You can always pay extra, but you cannot make a 15-year payment smaller when money is tight.
- Competing goals. The monthly difference could go toward retirement accounts, an emergency fund or paying off higher-rate debt.
The middle path: a 30-year loan with extra payments
You can take a 30-year loan and pay more whenever you are able. You will not match a 15-year loan's lower rate, but you keep the option to fall back to the minimum payment in a hard month. Before relying on this, confirm that your loan has no prepayment penalty and that extra money is applied to principal. It also takes discipline, since nothing forces you to keep paying extra.
Which one fits you?
A 15-year mortgage tends to suit people who have stable income, a solid emergency fund and retirement savings already on track, and who can comfortably afford the higher payment. A 30-year mortgage tends to suit first-time buyers, people with variable income, and anyone who would otherwise have to drain savings to make the payment.
A useful check is to look at the 15-year payment and ask whether you could still cover it for several months after losing your income. If the answer is no, the lower required payment of a 30-year loan is worth paying for. Terms of 20 years are also available from many lenders and sit between the two.
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This article is general information, not financial, tax, legal or insurance advice. Figures are illustrative examples.