15-year vs. 30-year mortgage
A 15-year loan costs far less interest but needs a much bigger payment. Here are the real numbers at this week's rates, and a middle path.
Last reviewed October 13, 2026. Figures use Freddie Mac's average rates for the week of October 8, 2026.
The numbers on a $320,000 loan
| Measure | 30-year | 15-year |
|---|---|---|
| Average rate | 7.40% | 6.73% |
| Monthly payment (principal and interest) | $2,215.62 | $2,828.16 |
| Total interest | $477,617 | $189,070 |
| Still owed after 5 years | $302,473 | $246,524 |
| Still owed after 10 years | $277,128 | $143,751 |
The 15-year loan's payment is $612.54 a month higher, and it saves $288,547 in interest. Two things drive the saving: you borrow the money for half as long, and lenders charge less for shorter loans, about 0.67 percentage points less this week.
Why choose a 30-year loan
- A lower required payment, which leaves room in your budget and can help you qualify for the loan at all.
- Flexibility. You can pay more when money is good and fall back to the lower payment when it isn't.
- Money for other goals, such as an emergency fund or retirement saving, which some people prioritize over paying off a low-rate debt early.
Why choose a 15-year loan
- Much less interest, from both the shorter term and the lower rate.
- Equity builds fast. After five years you owe far less, which helps if you sell or prices fall.
- Debt-free sooner, often before retirement or before children's college costs.
The middle path: a 30-year loan, paid early
If you take the 30-year loan but pay the 15-year payment anyway, putting the extra $612.54 toward principal each month, the loan is paid off in 16 years, 3 months with $230,424 of interest. That is $247,193 less than the plain 30-year loan, but $41,354 more than the 15-year loan, because the 30-year rate is higher. You pay that difference for the right to drop back to the lower payment whenever you need to.
Before paying extra, check that your loan has no prepayment penalty (most don't) and ask the servicer to apply extra payments to principal. The amortization calculator shows exactly what any extra payment saves.
How to decide
A common test: if the 15-year payment fits comfortably in your budget while you still save for emergencies and retirement, it's the cheaper loan. If it would stretch you, take the 30-year loan and pay extra when you can. Compare both on your own numbers in the mortgage calculator by switching the loan term.
Principal and interest only. Property tax and insurance are the same for both loans; PMI, if you pay it, ends sooner on the 15-year loan. Estimates for planning, not financial advice.