15-Year vs 30-Year Mortgage: The Real Difference

Mortgage Term Comparison

Choosing between a 15-year and 30-year mortgage is one of the biggest decisions when buying a home. The right choice depends on your financial situation and goals.

15-Year Mortgage

Advantages:

• Lower interest rates (typically 0.5-1% lower than 30-year)
• Build equity faster
• Pay off your home in half the time
• Save tens of thousands in interest

Disadvantages:

• Higher monthly payments (about 40-50% higher)
• Less cash flow flexibility
• May limit the price of home you can afford

30-Year Mortgage

Advantages:

• Lower monthly payments
• More affordable for most buyers
• Flexibility to invest the difference
• Easier to qualify for

Disadvantages:

• Pay much more interest over the life of the loan
• Slower equity building
• Debt for twice as long

The "Invest the Difference" Strategy

Some experts suggest taking a 30-year mortgage and investing the payment difference. This can work if:

• You consistently invest the savings
• Your investments earn more than your mortgage rate
• You have the discipline to follow through

Which Should You Choose?

Choose 15-year if:

• You can afford the higher payment comfortably
• You want to be debt-free faster
• You're closer to retirement
• You value guaranteed returns (saved interest)

Choose 30-year if:

• The higher payment would strain your budget
• You want flexibility for other investments
• You have high-interest debt to pay off
• Your income is variable or uncertain

Compare both options with our mortgage calculator.