How the comparison works
Both loans use the standard payment formula M = P × r / (1 − (1 + r)^−n). Total interest is the sum of all payments minus the amount borrowed. Shorter-term loans usually carry lower rates, so they win twice: less time for interest to build up, and a lower rate while it does.
Worked example
$300,000 borrowed; 15 years at 5.75% versus 30 years at 6.5% (example rates):
| 15-year payment | $2,491.23 |
|---|---|
| 30-year payment | $1,896.20 |
| Extra per month for 15-year | $595.03 |
| 15-year total interest | $148,421 |
| 30-year total interest | $382,632 |
| Interest saved | $234,211 |
| 30-year paid at the 15-year payment | 16 years 4 months, $187,167 interest |
Paying the 30-year loan at the 15-year payment gets you most of the way there — but not all, because the 30-year rate is higher. What you gain is the right to fall back to the lower payment in a tight month.
Which term should you choose?
- 15-year if the higher payment still leaves a comfortable budget, you have an emergency fund, and you value being debt-free sooner.
- 30-year if you need the lower payment to qualify, want flexibility, or would invest the difference.
- Check affordability of the higher payment with the DTI calculator before committing.
Frequently asked questions
Is a 15-year mortgage always cheaper?
In total interest, yes, at any positive rate. It is not always the better choice: the higher payment reduces flexibility and money available for other goals.
Can I compare other terms?
Yes. Both terms are editable, so you can compare 10, 20 or 25 years as well.