15-yearvs30-year
15 vs 30 Year Mortgage Calculator
Enter the loan amount and the rate each term is quoted at. The verdict compares the 15-year's forced extra payment against putting the 30-year's lower payment to work at your own investment return, at year 15 and year 30.
The loan and the alternative
What the 30-year's lower payment would earn if the difference were invested every month.
The 15-year builds $42,636 more net worth by year 30
The 15-year costs $644/month more but saves $238,666 in lifetime interest; the 30-year frees up that $644/month to invest at 7%.
At 0% the 15-year almost always wins on net worth. Raise this toward long-run stock-market averages and the 30-year-plus-investing case gets stronger.
| 15-year | 30-year | |
|---|---|---|
| Monthly payment | $2,615 | $1,970 |
| Total interest paid | $150,640 | $389,306 |
| Net worth at year 15 | $320,000 | $294,449 |
| Net worth at year 30 | $1,148,751 | $1,106,115 |
How this is calculated
Both payments use the standard amortization formula on the same loan amount. Net worth tracks two things per plan: home equity (principal paid down so far) and an investment account. The 15-year plan invests nothing until year 15, when the paid-off loan frees its entire former payment; the 30-year plan invests the monthly payment difference from day one, compounding at the stated return.
| Investment return | 15-year net worth @30 | 30-year net worth @30 | Winner |
|---|---|---|---|
| 3%/yr | $913,458 | $695,499 | 15-year |
| 7%/yr | $1,148,751 | $1,106,115 | 15-year |
| 10%/yr | $1,403,702 | $1,776,595 | 30-year |
At a 3%/yr return the 15-year wins comfortably; push the return to 10%/yr and the 30-year-plus-investing strategy pulls ahead. Somewhere between those two is the crossover -- move the sensitivity slider to find it for your own rates.
Frequently Asked Questions
How much more is the 15-year payment, really?
On a $320,000 loan at typical rates (15-year 5.5%, 30-year 6.25%), the 15-year payment is $2,615/month against $1,970 for the 30-year -- a difference of $644/month. That difference is the whole trade-off: pay it toward principal, or invest it.
How much interest does the 15-year actually save?
$238,666 on these numbers ($389,306 of lifetime interest on the 30-year versus $150,640 on the 15-year). That's a guaranteed, risk-free return equal to the 15-year rate -- there's no market involved.
So which one actually builds more wealth?
It depends entirely on the investment-return assumption for the 30-year's freed-up payment. At a 7% return, the 15-year is still ahead at year 30 ($1,148,751 versus $1,106,115) -- because the 15-year rate is a guaranteed 5.5% return and the invested difference needs to beat that consistently for 30 years, including the 15 years before the 15-year loan is even paid off and its own former payment starts getting invested too.
Why does the 15-year's advantage look bigger at year 15 than year 30?
At year 15, the 15-year borrower has zero debt and full equity, while the 30-year borrower still owes roughly half the original loan and has only 15 years of the smaller monthly difference invested. From year 15 to 30, the 15-year borrower starts investing their entire former payment too, which narrows -- though on these numbers doesn't close -- the gap.
Is 'invest the difference' realistic?
Only if you'd actually do it every month for 15-30 years, through market downturns, without skipping contributions. The 15-year's advantage is forced and automatic; the 30-year's advantage requires discipline the calculator can't verify. That behavioral gap is a real reason many financial planners default to recommending the 15-year even when the math is close.
What if I can't afford the 15-year payment?
Then this isn't really a choice -- take the 30-year loan and, if you want the 15-year's discipline without its required payment, make extra principal payments voluntarily when cash flow allows. You keep the lower required payment as a floor during a tight month, with the option to pay it down faster.
SidebySideCalc calculators apply standard, published formulas -- loan amortization, future-value-of-annuity, and deductible/coinsurance cost-sharing math -- to the numbers you enter. They are estimates for comparing two paths, not tax, legal, or financial advice: your lender, plan documents, and a tax professional decide the real figures for your situation.