The 15-year mortgage sounds like an obvious win: pay your home off in half the time, save a fortune in interest. And the math backs up the savings. But the monthly payment jumps enough to break many budgets. Here is the real comparison on a $400,000 loan.

The exact numbers

Assume a 30-year rate of 6.5% and a 15-year rate of 5.75% (15-year rates typically run 0.5–0.75% lower):

| | 30-year @ 6.5% | 15-year @ 5.75% | |---|---|---| | Monthly payment | $2,528 | $3,322 | | Total interest | $510,178 | $197,895 | | Payoff | Year 30 | Year 15 |

The 15-year mortgage costs $793 more per month but saves $312,283 in interest and frees you from the payment 15 years sooner. That is the entire tradeoff in one table.

What the 15-year buys you (besides savings)

  • Forced discipline. The higher payment is a commitment device — you build equity fast whether you feel like it or not.
  • Lower rate. Lenders reward the shorter term, which compounds the savings.
  • Retirement timing. A 15-year loan taken at 40 ends at 55, right before retirement. A 30-year loan taken at 40 ends at 70.

What it costs you

  • Flexibility. That extra $793/month is locked in. Lose your job or face a big repair bill, and there is no dialing the payment down.
  • Opportunity cost. $793/month invested at 7% for 15 years grows to roughly $250,000. If your mortgage rate is well below your expected investment return, the 30-year loan plus investing the difference can win on net worth.
  • Liquidity. Extra equity is not an emergency fund. Money trapped in home equity cannot cover a layoff without a HELOC or sale.

The hybrid: 30-year loan, 15-year behavior

There is a middle path most buyers overlook: take the 30-year mortgage for the lower mandatory payment, then voluntarily pay extra principal each month as if it were a 15-year loan. You get nearly the same interest savings, but in a crisis you can drop back to the minimum payment. The catch is honesty — the strategy only works if you actually make the extra payments.

Run both scenarios with our mortgage calculator and see what extra payments do to your payoff date. If you already have a 30-year loan, check whether refinancing into a 15-year makes sense with the refinance calculator — also see when refinancing is worth it.

Estimates for planning only, not financial advice. Actual rates depend on your lender, credit and market conditions.