Your mortgage term can shape your entire homeownership journey. A 15-year loan saves you the most money and gets you debt-free faster, but a 30-year loan keeps monthly payments lower so you have extra cash for other goals.
So, which should you choose? The TL;DR is: Go for a 15-year mortgage if paying off your home quickly is your top priority and you can handle higher payments. Choose a 30-year loan if you want smaller monthly payments or need more financial leeway. Here’s how a 15 vs. 30-year mortgage compares so you can decide which is right for you.
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15-year vs. 30-year mortgage
Choosing between a 15- or 30-year mortgage boils down to what you value most: becoming mortgage-free faster or having low monthly payments. There is no wrong answer, and it ultimately depends on what best fits your needs.
This chart summarizes the most important differences between 15 vs 30-year mortgages. Understanding these basics can help you decide on the right loan.
| 15-year mortgage | 30-year mortgage | |
| Monthly payment | Higher | Lower |
| Interest rate | Usually lower | Usually higher |
| Total interest paid | Much less | Much more |
| Loan term | 15 years (180 months) | 30 years (360 months) |
| Equity building speed | Faster | Slower |
| Best for | Early payoff, interest savings | Lower monthly payments |
Ready to compare mortgage rates? Finding the best mortgage starts with shopping around. Use a marketplace like LendingTree to compare offers from multiple lenders in minutes.
Pros and cons of a 15-year mortgage
Pros
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You’ll pay less interest
One of the biggest benefits is how much money you’ll save by paying off your loan in 15 years instead of 30. For example, on a $400,000 loan with a 7% APR, you’d pay about $247,000 in interest over 15 years. But with a 30-year loan, you’d pay $558,000—more than double.
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You’ll build equity faster
With a 15-year mortgage, a larger chunk of your payments will go toward your loan’s principal balance, which will help you build equity faster. This could be helpful if you plan to sell for more than you owe, refinance, or take out a home equity loan in the future.
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You’ll (probably) get a lower interest rate
Lenders often have lower starting APRs for 15-year loans because they’ll recoup their investment faster than if you repaid over 30 years.
Cons
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Monthly payments will be higher
Your monthly payment will be much higher. On a $400,000 loan at 7%, you’d pay about $3,600 per month on a 15-year loan, compared to $2,660 for a 30-year loan.
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Less room for other expenses
With a higher monthly payment, you might have less money for things like savings, vacations, or home repairs.
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It could limit your home choices
If your dream home is at the top of your budget, you may need a 30-year loan with smaller monthly payments to qualify.
Pros and cons of a 30-year mortgage
Pros
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You’ll have more spare cash for other goals
With a lower monthly payment, you free up extra cash you could use for savings, investments, unexpected home repairs, or even a second property. On a $400,000 loan with a 7% APR, you’d have about $940 extra to do with what you wish.
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You might qualify for a larger loan
Smaller monthly payments mean lenders may approve you for a bigger mortgage. This could help you afford a more expensive home if you’re buying in a competitive market.
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You can still pay your loan off early
Nothing is stopping you from getting a 30-year mortgage and making extra payments to pay it off faster. You’ll still save money without being locked into higher monthly payments like with a 15-year loan.
Cons
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You’ll pay a lot more for your house
The biggest downside of a longer term is that it causes your overall costs to balloon. On a $400,000 loan at 7%, you’d pay $958,000 in total for your house over 30 years—compared to $647,160 for a 15-year loan.
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There’s a risk of lifestyle creep
A lower monthly payment might tempt you to buy more house than you can comfortably afford. If your expenses rise too much, it could cause a lot of stress and financial strain you didn’t sign up for.
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It’s a longer financial commitment
Committing to a 30-year loan means you could likely be making payments well into retirement unless you pay off the loan early.
Financial comparison of a 30-year vs. 15-year mortgage
Sometimes, the best way to see how a 15-year and 30-year mortgage compare is to run the numbers. Use our mortgage calculator for any home loans you’re considering.
Below, we’ll compare how monthly payments, total interest paid, and equity buildup vary for three loan amounts: $300,000, $500,000, and $700,000. For all of these examples, we use average interest rates of 7% for a 30-year loan and 6.5% for a 15-year loan.
Monthly payment breakdown
How much you pay per month for your mortgage will largely depend on your loan amount, term, and the interest rate. Here’s how monthly payments stack up for a $300,000, $500,000, and $700,000 mortgage loan:
| Loan amount | 30-year loan (7% APR) | 15-year loan (6.5% APR) | Difference |
| $300,000 | $1,996 | $2,613 | $617 |
| $500,000 | $3,327 | $4,356 | $1,029 |
| $700,000 | $4,657 | $6,098 | $1,441 |
👉 Key takeaway: The 30-year loan keeps your monthly payments much lower, but a 15-year loan pays off your home much faster.
Total interest paid over the loan term
As you shop for a loan, you may notice that the best mortgage rates are slightly lower for a 15-year term. Not only does this reduce your mortgage payment slightly, but it also means you’ll pay much less interest overall.
Here’s how the total interest paid would vary overall for a $300,000, $500,000, and $700,000 mortgage:
| Loan amount | Total interest paid 30-year loan (7%) | Total interest paid 15-year loan (6.5%) | Total interest saved with 15-year |
| $300,000 | $418,527 | $170,398 | $248,129 |
| $500,000 | $697,544 | $283,997 | $413,547 |
| $700,000 | $976,562 | $397,595 | $578,967 |
👉 Key insight: The 15-year mortgage slashes interest costs dramatically. If minimizing interest is your top priority, the savings can be life-changing.
Equity build-up over time
Equity builds faster with a 15-year mortgage since more of your payment goes toward the loan principal from day one.
| Loan amount | Equity after 10 years (30-year term; 7% APR) | Equity after 10 years (15-year term; 6.5% APR) |
| $300,000 | $42,563 | $166,437 |
| $500,000 | $70,938 | $277,394 |
| $700,000 | $99,313 | $388,352 |
👉 Key insight: Building equity faster can unlock financial opportunities sooner. With more equity, you can tap into a home equity loan or line of credit (HELOC) for renovations, debt consolidation, or even a down payment on a second property—potentially at a lower interest rate than other loans.
Should you get a 15- or 30-year mortgage? What to consider
A lot goes into deciding between a 15- and 30-year mortgage. Use this chart to weigh which might be right for you.
| If… | You may want to consider… |
| You have a stable, high income | A 15-year mortgage |
| Your DTI is already on the higher side | A 30-year mortgage |
| You want to be mortgage-free as soon as possible | A 15-year mortgage |
| You want extra cash for investing or saving | A 30-year mortgage |
| You have a secure job and strong savings | A 15-year mortgage |
| You work in an unstable industry | A 30-year mortgage |
Let’s run through a few of these factors in detail, giving you some context for how to think about them.
1. Income stability and job security
Is your income steady, or does it fluctuate? A 15-year mortgage has higher payments, so it will be less forgiving if your income drops. A 30-year loan gives you a bit of a safety cushion, so you have some breathing room in tough times.
When in doubt, go with the 30-year mortgage and make extra payments when your income is strong. You’ll still pay off your loan faster without locking yourself into higher monthly payments you can’t adjust.
2. Debt-to-income ratio
Lenders calculate your DTI ratio by dividing your monthly debt payments by your gross monthly income. If a lender’s max DTI for a mortgage is 43%, your monthly debt payments—credit cards, car loans, student loans, and future mortgage—can’t exceed 43% of your income.
For example, say you earn $6,000 monthly and already have $1,000 in monthly debt payments. That leaves $1,580 for your maximum mortgage payment ($6,000 × 43% = $2,580 – $1,000 existing debt).
If a 15-year mortgage on the home you want costs $1,800 per month, your DTI would hit 46%—over the lender’s limit. But if a 30-year mortgage drops your payment to $1,200, your DTI becomes 36%—enough to get approved.
Even if you prefer a 15-year loan, a 30-year mortgage might be your only approval option if your DTI is close to the lender’s cap. You can always make extra payments later to reduce your debt faster.
3. Retirement planning
The mortgage term you choose may also be influenced by your retirement plans and how prepared you feel.
For example, if you’re already on track for retirement and want to be debt-free by the time you stop working, a 15-year mortgage could be smart—if the higher payments won’t prevent you from meeting other goals like saving or investing.
Run the numbers before deciding. If a 15-year mortgage stretches your budget too thin to save for retirement and other investments, opt for the 30-year term—and commit to extra payments when you can. This gives you flexibility while still allowing you to chip away at your mortgage faster.
But if you’re playing financial catch-up, maxing out your 401(k) or IRA contributions each year might be more important. In that case, a 30-year mortgage with lower monthly payments could free up cash to build your retirement nest egg.
I see more clients opting for a 30-year mortgage the majority of the time. This allows flexibility with their budget to apply funds toward other goals. Additionally, if there is the option to make extra payments and pay off the mortgage by retirement (for example, in 20 years vs. 30) and the prepayment penalty is insignificant or non-existent, then this is the plan we will prepare—either by paying extra each month or additional lump sum payments when a bonus or other windfall is received throughout the year or once per year. My clients with significant excess cash flow and whose main goal is to pay off their mortgage as soon as possible will usually opt for the 15-year mortgage while ideally locking in a lower interest rate than the 30-year mortgage.
About our contributors
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Written by Cassidy Horton, MBACassidy Horton is a finance writer passionate about helping people find financial freedom. With an MBA and a bachelor's in public relations, her work has been published more than 1,000 times online.