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15 vs 30 Year Mortgage Calculator

See the real cost difference between a 15-year and a 30-year mortgage on the same loan.

How it is calculated

For each term the engine uses the standard fixed-rate payment P = L × r × (1 + r)^n ÷ ((1 + r)^n − 1), where L is the loan amount, r is the annual rate ÷ 100 ÷ 12 and n is 180 payments for the 15-year loan and 360 for the 30-year loan. At a 0% rate it falls back to L ÷ n. Total interest is P × n − L, and the saving is the 30-year interest minus the 15-year interest. You enter two separate rates because lenders usually price the shorter term lower. Results are in dollars. No result is shown if the loan amount is zero or negative, if either rate is negative, or if either rate is above 100%. Taxes, insurance, fees and extra payments are not included, and the rate is assumed fixed for the whole term.

Worked example

Borrow $300,000, with a 5.75% rate on the 15-year loan and 6.5% on the 30-year. For the 15-year loan: r = 0.0575 ÷ 12 = 0.004792, n = 180, giving a payment of $2,491.23 and total interest of 2,491.23 × 180 − 300,000 = $148,421.45. For the 30-year loan: r = 0.065 ÷ 12 = 0.005417, n = 360, giving $1,896.20 and interest of $382,633.47. The difference is $234,212.02 of interest saved, in exchange for paying $595.03 more each month.

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Common mistakes

  • Entering the same rate for both terms. The shorter loan normally has a lower quoted rate, so use each loan's own offer to avoid understating the saving.
  • Typing a rate as a decimal (0.065) instead of a percent (6.5). The payment then looks about 10 times too small and the comparison is meaningless.
  • Judging only the interest saved. The 15-year payment is much higher, and if you cannot afford it the saving is theoretical.
  • Ignoring what the lower 30-year payment could earn elsewhere. The comparison counts interest only, not the return on money you keep.
  • Adding property tax and insurance to the loan amount. Enter only the amount borrowed.

Sources

About this calculator

Choosing between a 15-year and a 30-year fixed-rate mortgage on the same loan amount is fundamentally a trade-off between monthly cash flow and total interest paid. A 15-year loan carries a higher monthly payment because principal is repaid over half the time, but it typically comes with a lower interest rate and a dramatically smaller total interest bill, since amortization spreads far less interest over a shorter payoff period.

Mortgage lenders, financial advisors, and homebuyers use this comparison during loan shopping because the two terms serve different goals: a 30-year term maximizes monthly affordability and frees up cash for other investments or expenses, while a 15-year term builds equity faster and can save tens of thousands of dollars in interest over the life of the loan, at the cost of a stiffer required payment.

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