Use this 15 vs 30 year mortgage calculator to compare monthly payments, total interest, and lifetime cost side by side and see what a 15 year loan saves.
15 vs 30 Year Mortgage Formula
The calculator computes the fixed monthly principal and interest payment for the same loan amount over each term:
M = L * r / (1 - (1 + r)^-n)
It then compares the lifetime cost of the two loans:
Interest = M * n - L Savings = (M30 * 360) - (M15 * 180)
Variables:
- M is the monthly principal and interest payment (M30 for the 30-year loan, M15 for the 15-year loan)
- L is the loan amount, the same for both terms
- r is the monthly interest rate for that term, the annual percentage divided by 1200
- n is the number of payments: 360 for the 30-year term, 180 for the 15-year term
- Savings is the total interest you avoid by choosing the 15-year loan
Enter the loan amount and a rate for each term. Because lenders price shorter loans as lower risk, 15-year rates typically run 0.5 to 0.75 percentage points below 30-year rates — enter the actual quotes you received for the fairest comparison.
The calculator returns the monthly payment difference as the headline, then a side-by-side table of monthly payment, total interest, and total amount paid for each term. The 15-year loan wins on lifetime cost in almost every realistic scenario; the 30-year loan wins on monthly affordability and flexibility. The comparison covers principal and interest only, since taxes and insurance are the same under either term.
15 vs 30 Year Cost of a $300,000 Loan
This table compares both terms on a $300,000 loan, with the 15-year rate set 0.625 points below the 30-year rate at each level — the middle of the typical spread.
| Rates (30yr / 15yr) | 30-yr payment | 15-yr payment | 30-yr interest | 15-yr interest | Interest saved |
|---|---|---|---|---|---|
| 5.500% / 4.875% | $1,703.37 | $2,352.89 | $313,212.12 | $123,520.61 | $189,691.51 |
| 6.000% / 5.375% | $1,798.65 | $2,431.40 | $347,514.57 | $137,651.33 | $209,863.24 |
| 6.500% / 5.875% | $1,896.20 | $2,511.36 | $382,633.47 | $152,043.99 | $230,589.48 |
| 7.000% / 6.375% | $1,995.91 | $2,592.75 | $418,526.69 | $166,695.20 | $251,831.50 |
| 7.500% / 6.875% | $2,097.64 | $2,675.56 | $455,151.67 | $181,601.34 | $273,550.33 |
Example Problems
Example 1: Comparing terms on a $300,000 loan.
You are quoted 6.5% for a 30-year loan and 5.875% for a 15-year loan on $300,000. The 30-year payment is M30 = 300,000 * (6.5/1200) / (1 – (1 + 6.5/1200)^-360) = $1,896.20, and the 15-year payment is M15 = 300,000 * (5.875/1200) / (1 – (1 + 5.875/1200)^-180) = $2,511.36 — a difference of $615.15 per month.
Total interest is 1,896.20 * 360 – 300,000 = $382,633.47 on the 30-year and $152,043.99 on the 15-year, so the 15-year loan saves $230,589.48 and is paid off 15 years sooner, in exchange for the higher payment.
Example 2: The same comparison at 7.0% / 6.375%.
On the same $300,000 loan, the payments are $1,995.91 (30-year) and $2,592.75 (15-year), a $596.84 monthly difference, and choosing the 15-year term saves $251,831.50 in interest.
Frequently Asked Questions
Why are 15-year mortgage rates lower than 30-year rates?
Lenders take on less risk with a shorter loan: the money is repaid faster, there is less time for rates or the borrower’s finances to move against them, and the loan builds equity quickly. That is why 15-year fixed rates have historically priced about 0.5 to 0.75 percentage points below 30-year rates. The lower rate compounds the savings — you pay interest at a lower rate and for half as many years.
Is it better to take a 30-year loan and pay it like a 15-year?
Making 15-year-sized payments on a 30-year loan gets you most of the interest savings while keeping the option to drop back to the lower required payment if money gets tight. The trade-off is cost and discipline: the 30-year carries a higher rate, so even with identical payments you pay off slightly slower and pay more interest, and the strategy only works if you consistently make the bigger payment. If your income is stable and the payment fits under roughly 28% of gross income, the true 15-year is cheaper.
Can I refinance from a 30-year to a 15-year mortgage?
Yes, and homeowners often do this after incomes rise or rates fall, capturing the lower 15-year rate for the remaining balance. Refinancing means new closing costs — typically 2% to 5% of the loan amount — so compare the interest saved against those fees and how long you plan to stay in the home. An alternative with no closing costs is simply prepaying your current loan on a 15-year schedule.
