A 15-year mortgage has a much higher monthly payment than a 30-year loan but costs far less in total interest. Enter the rate you are quoted for each term to see the payment gap, the interest each loan charges, how fast each balance falls, and whether investing the payment difference could beat paying the house off early.
Freddie Mac weekly averages (Oct 8, 2026)
- 30-year fixed
- 7.40%
- Primary Mortgage Market Survey
- 15-year fixed
- 6.73%
- About 0.67 points lower
- A year earlier
- 6.30% / 5.53%
- 30-year / 15-year
- Your rate
- Varies
- Credit, down payment, points and lender
How the calculation works
- Payments: each loan uses the standard amortization formula, payment = P × r ÷ (1 − (1 + r)−n), where r is the yearly rate ÷ 12 and n is 180 or 360 months.
- Interest: each month we charge interest on the remaining balance and apply the rest of the payment to principal, then add up the interest.
- Paying the 30-year faster: we also run the 30-year loan with the 15-year payment, and with any extra amount you enter, to show the new payoff date.
- Invest the difference: both paths spend the same money each month for 30 years. Path A pays the 15-year loan, then invests the 30-year payment for years 16–30. Path B pays the 30-year loan and invests the difference for the first 15 years. Growth is compounded monthly at your return, before taxes and fees.
Worked example
You borrow $500,000. You are quoted 6.75% for 15 years and 7.375% for 30 years.
| Result | 15-year | 30-year |
|---|---|---|
| Monthly principal & interest | $4,425 | $3,453 |
| Total interest | $296,419 | $743,215 |
| Balance after 5 years | $385,333 | $472,496 |
| Balance after 10 years | $224,785 | $432,772 |
| Balance after 15 years | $0 | $375,398 |
The 15-year loan costs $971 more a month and saves about $446,800 in interest. Paying $4,425 a month on the 30-year loan instead would clear it in 16 years 2 months with $356,353 of interest, close to the 15-year result but with the option to pay less in a bad month.
At a steady 5% return, path A (15-year loan, then invest) ends with about $923,000 invested after 30 years; path B ends with about $549,000. In this example path B only pulls ahead at a steady return of about 8.5% a year after taxes and fees, above the 7.375% mortgage rate, and only if you really invest the difference every month. Change the return to see where the answer flips for your numbers.
Who each term suits
- 15-year: steady income, a solid emergency fund, and a goal of being mortgage-free sooner, for example before retirement.
- 30-year: a tighter budget, uneven income, or other priorities such as retirement savings or paying off higher-rate debt. You can still prepay when it suits you.
- Qualifying: the higher 15-year payment raises your debt-to-income ratio, which can lower the price you qualify for.
Next steps
See every payment in the amortization schedule calculator, test prepaying with the extra payment calculator, and weigh prepaying against investing in pay off your mortgage early or invest?