15- vs. 30-year mortgage

Scenario. A $400,000 loan. The 30-year is priced at 6.76%; the 15-year at 6.09% — both Freddie Mac's published average for the week, not an assumed spread.

Representative scenario — run your own numbers with the linked calculators.
	30-year fixed	15-year fixed
Monthly payment (P&I)	$2,597	$3,395
Total interest	$534,940	$211,083
Total paid	$934,940	$611,083
Equity built in 5 years (principal only)	$24,455	$95,450
Debt-free in	30 years	15 years

Run “30-year fixed” → · Run “15-year fixed” →

The trade-off in one line

The 15-year mortgage costs far less over its life and builds equity roughly three times faster, but the monthly payment is about 40–45% higher. The 30-year mortgage costs more in total and pays down slowly, but the lower required payment leaves room in the budget for everything else.

The 15-year's lower rate — typically half a point to a full point below the 30-year — is real money, but it does not close the payment gap, because you are compressing the same principal into half the time.

Who each one suits

Choose the 15-year if the higher payment still leaves you fully funding retirement and an emergency fund, and you value being debt-free sooner.
Choose the 30-year if you want payment flexibility, plan to invest the difference, or the 15-year payment would crowd out other goals.
A common hybrid: take the 30-year for its safety net, then voluntarily pay it on a 15-year schedule. You capture most of the interest savings and can drop back to the required payment in a tight month.

Frequently asked questions

How much more is a 15-year payment?

Roughly 40–45% higher than the 30-year on the same loan amount, even after accounting for the 15-year's lower rate. On a $400,000 loan that is often $900–$1,100 more per month.

Is the interest savings on a 15-year really that big?

Yes. You borrow the money for half as long and at a lower rate, so lifetime interest typically drops by 60–70%. On a $400,000 loan the difference is well over $200,000.

Can I just pay my 30-year loan faster?

Yes, and for most borrowers that is the pragmatic choice. Paying a 30-year loan on a 15-year schedule captures nearly all the interest savings while preserving the option to pay less in a hard month.

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