30-year vs 15-year mortgage — which is better?

A 15-year term usually has a higher scheduled monthly payment and less total interest than a 30-year term for the same principal and rate. Compare actual Loan Estimates: rates, fees, mortgage insurance, and cash-flow needs can change the result. A 30-year loan with optional extra principal is not identical to a 15-year loan.

PITI means principal, interest, taxes, and insurance. This calculator estimates principal and interest only. Property and homeowners insurance costs depend on the home and location; mortgage insurance and HOA dues may also apply. Use lender, insurer, tax-assessor, and HOA estimates for a budget.

Educational tool — not investment advice. How to protect your money →

Home loans

Mortgage calculator

Free mortgage calculator. See your monthly payment, total interest paid, and how much you'd save with extra monthly payments — instantly.

By Snowballr Research Team

Fact-checked against primary sourcesEditorial standards

Coverage: Compound interest · Retirement · FIRE · Debt payoff · Mortgages · Fraud prevention

Built from: IRS · FINRA · SEC · BLS · Federal Reserve · Freddie Mac30+ primary sources verified

Methodology & sourcesHow we review →

Backed by our research

5,000-scenario prepay vs invest sweep — the crossover sits ~50 bps above your assumed equity return. Compare the assumptions in the study with your own loan and investment scenarios.

Illustrative payment scenarios

$300K @ 6.5% / 30 yrs (illustrative scenario)

$1,896/mo P&I · $382,633 total interest · $200/mo extra saves about $103,449 and 83 months

$500K at 6.75% / 30 years

$3,242 monthly principal and interest. Fixed-rate illustration; excludes taxes, insurance, mortgage insurance, HOA dues, and fees.

$300K @ 6% / 15 yrs vs 30 yrs

15yr: $2,532/mo, $156K interest · 30yr: $1,799/mo, $347K interest · diff $191K

Refinance comparison

Compare the current loan with a written offer, including remaining and new terms, points, closing costs, and total interest. A lower monthly payment alone does not show total savings.

Want to compare a specific loan amount, rate, and term? Browse worked mortgage payment examples.

Key mortgage terms (used throughout this page)

PITI: Principal, interest, taxes, and insurance. This calculator estimates principal and interest only; mortgage insurance or HOA dues may be separate, and utilities and maintenance are additional ownership costs.
Amortization: How each payment splits between interest and principal. Year 1 is mostly interest; year 30 mostly principal.
PMI: Private mortgage insurance may apply to some conventional loans with less than 20% down. For many covered loans, borrowers may request cancellation at 80% of the home's original value and automatic termination generally occurs at 78% when payments are current. CFPB explains the conditions; FHA and VA rules differ.
LTV: Loan balance divided by home value. LTV can affect loan pricing and mortgage-insurance requirements; there is no single refinance cutoff for every lender and product.
DTI: Total monthly debt payments divided by gross monthly income. Lenders use different limits for different products; DTI alone does not determine what fits your household budget. CFPB overview.
Points: A discount point is 1% of the loan amount paid upfront to reduce the rate. The reduction varies by lender, loan, and market; compare Loan Estimates and calculate your own break-even. CFPB explains points.

How is a mortgage payment calculated?

A monthly mortgage payment is calculated with the formula M = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1], where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments (years × 12). For a $300,000 loan at 6.5% over 30 years, the monthly principal-and-interest payment is about $1,896. Property tax, homeowners insurance, and HOA fees are added separately.

How mortgage payments work

A mortgage payment is calculated using the amortization formula. Early payments are mostly interest; later payments are mostly principal. On a $300,000 mortgage at 6.5% for 30 years:

Year 1: ~$19,400 goes to interest, only $3,350 to principal
Year 15: split roughly 50/50
Year 30: almost entirely principal

This is why extra payments early in the loan are dramatically more valuable than extra payments late. An extra $100 in year 1 reduces the principal that all future interest is calculated on for 29 more years.

Extra payment impact (on a $300k, 6.5%, 30-year mortgage)

$0 extra: $682,633 total paid, $382,633 in interest
$100/month extra: $621,639 total paid; saves $60,995 and 48 months
$200/month extra: $579,185 total paid; saves $103,449 and 83 months
$500/month extra: $502,874 total paid; saves $179,759 and 150 months
$1,000/month extra: $441,471 total paid; saves $241,162 and 207 months

Rounded to the nearest dollar. Fixed rate, monthly payments, extra principal paid from month one, and no fees or prepayment penalties. The final payment is reduced to the amount owed.

30-year vs 15-year mortgage

Same $300,000 loan at two illustrative fixed rates:

30-year at 6.5%: $1,896/month, $382,633 total interest
15-year at 5.75%: $2,492/month, $148,587 total interest

15-year saves $234,000 in interest but costs $596/month more. If you can afford the higher payment, 15-year wins. If cash flow is tight, 30-year with aggressive extra payments is often optimal — you get 80% of the savings with 100% of the flexibility.

Beyond P&I: the full cost of home ownership

Your principal-and-interest payment is only one part of a housing budget. Estimate these costs for the specific home and location:

Property tax and insurance: get current estimates for the property; premiums and tax bills depend on location, coverage, and home details.
Mortgage insurance: may apply depending on loan program and terms.
HOA dues, utilities, and maintenance: use the association's current dues and property-specific estimates; these costs vary widely.

For a full budget, include property taxes, homeowners and any required supplementary insurance, mortgage insurance, HOA dues, utilities, and maintenance. The CFPB budgeting guide recommends estimating these costs rather than relying on one universal percentage.

Should I pay off my mortgage early or invest?

There is no universal rate threshold. Extra principal can reduce future interest under the loan terms, while investment returns are uncertain and may involve fees and taxes. Before comparing, consider emergency savings, higher-rate debt, employer benefits, loan prepayment terms, tax effects, and how long you expect to keep the mortgage. Calculator scenarios are assumptions, not a personal recommendation.

Mortgage rate snapshot: 2026-10-08

30-year fixed: 7.40%. Freddie Mac PMMS weekly average; conventional conforming purchase applications.
15-year fixed: 6.73%. Freddie Mac PMMS weekly average; conventional conforming purchase applications.

Source: Freddie Mac Primary Mortgage Market Survey, week ending 2026-10-08; reviewed 2026-10-11. These are national weekly averages for conventional conforming purchase applications, not APRs or a personal loan offer. Your quoted rate and fees may differ.

Who this calculator is for

First-time buyer

Use a written rate quote and your estimated loan amount. Add property taxes, insurance, mortgage insurance if applicable, and HOA dues; compare the full monthly cost with your budget. See how much house can I afford.

Refi shopper

Compare the remaining cost of your current loan with the proposed loan, including points and closing costs. Term changes affect both payment and total interest. Use the refinance calculator as an estimate and verify figures in Loan Estimates.

Extra-payment optimizer

Compare extra payments using your balance and rate, then consider cash reserves, other debt, fees and the uncertain return of alternative investments.

Investor / second home

Investment-property loan rates, down-payment requirements, insurance, taxes, vacancy, and maintenance depend on lender, property, and location. Use written loan terms and property-specific estimates rather than assuming a fixed premium or expense percentage.

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Methodology & sources

Amortization formula: standard annuity present-value (M = P × r(1+r)^n / [(1+r)^n − 1])
30-yr / 15-yr / ARM rate averages: Freddie Mac Primary Mortgage Market Survey (PMMS), weekly
Conforming loan limits: FHFA 2026 Conforming Loan Limit notice
Median home price & down payment: NAR Existing-Home Sales + Profile of Home Buyers and Sellers
Debt-to-income ratios: CFPB DTI overview; lender and loan-product limits vary. See also the current HUD FHA Single Family Housing Policy Handbook.
PMI cancellation: CFPB guidance for covered conventional loans; FHA and VA mortgage-insurance rules differ.
Homeownership budget: CFPB home-buying budget guide.

FAQ

How is a mortgage payment calculated?

P × [r(1+r)^n] / [(1+r)^n − 1], where P = principal, r = monthly rate, n = total months. Our calculator runs this automatically.

How much do extra payments save?

For a $300,000 loan at a fixed 6.5% over 30 years, adding $200 monthly saves about $103,449 in interest and 83 months. Adding $500 saves about $179,759 and 150 months. These examples assume monthly payments, no fees or penalties, and extra payments applied to principal from the first month.

30-year or 15-year?

15-year saves ~$234k in interest but costs $596 more monthly. 30-year + extra payments is often the smartest hybrid.

What is PITI?

Principal, interest, taxes, and insurance. This calculator estimates principal and interest only. Taxes, insurance, mortgage insurance, HOA dues, and other costs vary; use property- and location-specific estimates.