Quick answer
A 15-year mortgage saves far more interest; a 30-year mortgage has a lower monthly payment. On $300,000, 15 years at 5.75% costs $2,491/month and $148,421 interest; 30 years at 6.5% costs $1,896/month and $382,633 interest.
Side-by-side on a $300,000 loan
| 15-year (5.75%) | 30-year (6.5%) | |
|---|---|---|
| Monthly payment | $2,491 | $1,896 |
| Total interest | $148,421 | $382,633 |
| Total paid | $448,421 | $682,633 |
| Equity after 5 years | $73,048 | $19,167 |
15-year loans usually carry a rate about 0.5–0.75 percentage points lower than 30-year loans, which is why the gap in total interest is so large.
Choose a 15-year mortgage if…
- The higher payment fits comfortably within 28% of your gross income.
- You want to be debt-free before retirement or your children's college years.
- You already have an emergency fund and are maxing out retirement contributions.
Choose a 30-year mortgage if…
- You need the lower payment to qualify or to keep a healthy cash buffer.
- You would rather invest the difference — at long-run stock returns this can outperform the interest saved, though with more risk.
- You want flexibility: you can still pay a 30-year loan off early with extra payments.
The hybrid strategy
Take a 30-year loan but pay it like a 20- or 15-year loan when cash flow allows. You keep the safety of a low required payment and still save most of the interest. Model it with the extra-payment field in our mortgage calculator.
Written by the Calcivia editorial team following our editorial policy. Educational information, not financial advice.
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