Compare 15, 20, and 30-year mortgage terms side by side. See monthly payment, total interest, and total cost for each so you can pick the right term for your budget and goals.
A 15-year mortgage has a lower interest rate and saves tens of thousands in total interest, but the monthly payment is 40-50% higher. A 30-year mortgage has lower monthly payments, giving you flexibility to invest the difference or handle emergencies. The best choice depends on your budget, investment goals, and risk tolerance.
On a $300,000 loan at current rates, a 15-year mortgage payment is typically 40-50% higher than a 30-year. For example, at 6% (30yr) vs 5.25% (15yr), the 15-year payment is about $2,414 vs $1,799 — a $615/month difference. But you save over $160,000 in total interest.
Yes. By making extra payments equal to the 15-year payment amount, you can pay off a 30-year mortgage in ~15 years. This gives you the flexibility to stop extra payments if needed, while still achieving 15-year savings. Use the mortgage early payoff calculator to see exactly how much extra to pay.
A 20-year mortgage is a middle ground between 15 and 30-year terms. It offers lower interest rates than a 30-year and lower monthly payments than a 15-year. Not all lenders offer 20-year terms, but they're worth asking about if you want a balance between payment size and total interest savings.
Compare three key factors: monthly payment (affordability), total interest paid (cost over the life of the loan), and total cost (principal + interest). Also consider opportunity cost — if you choose a 30-year with lower payments, could you invest the difference and come out ahead? Use this calculator to see all three metrics side by side.
From early payoff strategies to affordability checks:
A mortgage term is the number of years you have to repay the loan. The most common terms are 15, 20, and 30 years. Shorter terms come with lower interest rates — lenders take less risk over a shorter period — but higher monthly payments because you're repaying the same principal in fewer months. Longer terms spread the principal over more payments, lowering the monthly cost, but you pay significantly more interest over the life of the loan.
Typically, 15-year rates are 0.5-0.75% lower than 30-year rates, and 20-year rates fall somewhere in between. This rate advantage compounds the savings: you're paying a lower rate on the principal AND for fewer months. On a $300,000 loan, that dual advantage can mean $150,000-$200,000 less in total interest. Use the calculator above to see the exact numbers for your loan size and rate assumptions.
Choosing a 30-year mortgage doesn't mean you're stuck paying it for 30 years. The lower payment gives you flexibility: you can invest the monthly difference (30-year payment vs 15-year payment) in a diversified portfolio. Historically, the stock market returns 7-10% annually. If your mortgage rate is below 6% and you can earn 8% investing, the 30-year + invest-the-difference strategy can build more wealth over 30 years than the 15-year. But this requires discipline — you must actually invest the difference every month, not spend it.
If your mortgage rate is above 7%, the guaranteed return from paying it off faster almost certainly beats investing — stock market returns are not guaranteed, but mortgage interest savings are. In high-rate environments, the 15-year (or 30-year with aggressive extra payments) is the clear winner. In low-rate environments (sub-4%), the math favors the 30-year + invest strategy. Use this calculator to see where your situation falls.