15-Year vs. 30-Year Mortgage

By the TidyTally team · Last updated October 21, 2026

Choosing between a 15-year and a 30-year mortgage is a trade between monthly cash flow and total cost. A 15-year loan builds equity fast and costs far less interest, but the payment is much larger. A 30-year loan is easier on the monthly budget and more flexible, but costs far more over time. Here is how the two compare on a $300,000 loan using the mid-October 2026 Freddie Mac survey averages (7.40% for 30 years, 6.71% for 15 years).

The numbers side by side

On a $300,000 loan, a 30-year fixed at 7.40% has a principal-and-interest payment of about $2,077 a month and total interest of roughly $447,770. A 15-year fixed at 6.71% has a payment of about $2,648 and total interest of roughly $176,654.

That is a payment about $571 higher each month, in exchange for saving around $271,116 in interest and owning the home outright 15 years sooner. Try your own amounts and rates in the Mortgage Calculator.

Why the 15-year saves so much

Two forces work together: the rate is usually lower on the shorter term, and the balance is paid off in half the time, so interest has far less time to accumulate. Early payments on a 15-year loan also put a much larger share toward principal — see our explanation of how amortization works.

The case for the 30-year

The lower required payment is the main advantage: it is easier to qualify for, leaves more room in the monthly budget and provides a cushion if income dips. Borrowers can still pay it off faster by voluntarily adding extra principal, which gives flexibility that a 15-year loan does not. If you would invest the monthly difference and expect returns higher than your mortgage rate, some people argue the longer loan is a better use of cash — though investment returns are never guaranteed, while mortgage interest saved is.

It can also be the practical choice when buying a home that stretches your budget. The risk of a payment you cannot sustain is often greater than the benefit of saving interest.

The case for the 15-year

You build equity quickly, which provides a bigger cushion against price declines and more flexibility to move. You pay dramatically less interest, and you are mortgage-free earlier, which matters if you want to reach retirement without a housing payment. The forced discipline is itself a feature for people who might not otherwise save the difference.

The costs are real, though: a higher payment reduces your ability to build an emergency fund, invest in retirement accounts and absorb surprises. Many advisors caution against taking a 15-year loan if doing so means skipping employer retirement matches or draining reserves.

A hybrid approach

Many borrowers take a 30-year mortgage and treat the 15-year payment as a personal target when finances allow. That preserves the safety of a lower required payment while still allowing faster payoff. Simply adding a set amount each month — or making one extra payment per year — will shorten the loan; the Loan Payoff Calculator shows how much time and interest you would save.

How to decide

Ask yourself: can I afford the 15-year payment comfortably alongside housing costs, savings and a cushion? Do I have stable income? Have I maxed out employer retirement matching and built an emergency fund? If yes, the 15-year is attractive. If the higher payment would stretch you, a 30-year with an optional faster-payoff plan is usually the safer path. Also compare with an adjustable-rate option if you expect to move within a few years.

Frequently asked questions

Keep reading

• How Mortgage Amortization Works
• Fixed-Rate vs. Adjustable-Rate Mortgages
• How Much House Can You Actually Afford?