Should I get a 15-year or 30-year mortgage?

Choose a 15-year mortgage if you can comfortably afford the higher payment (roughly 40% more than a 30-year) and want to build equity faster and save significantly on interest. Choose a 30-year if you need the lower payment for cash flow flexibility, have other high-return investments, or are buying a first home with tight margins.

How much interest do you save with a 15-year mortgage?

The interest savings are substantial. On a $350,000 loan at 2026 rates (6.10% for 15-year, 6.75% for 30-year), a 15-year mortgage saves approximately $220,000–$250,000 in total interest over the life of the loan. However, monthly payments are roughly 40% higher.

Is a 30-year mortgage a bad idea?

Not necessarily. A 30-year mortgage gives you payment flexibility — you can always pay extra principal to build equity faster, but you're not locked into the higher payment. If you invest the difference between a 15-year and 30-year payment in the stock market historically averaging 7–10%, you may come out ahead financially even with more interest paid.

Can I pay off a 30-year mortgage in 15 years?

Yes. Making extra principal payments on a 30-year mortgage can dramatically shorten the term. Adding $500/month extra to a $350,000 mortgage at 6.75% would pay it off in about 20 years and save approximately $130,000 in interest. The flexibility to choose when and how much extra to pay is the advantage over being locked into a 15-year's fixed payment.

15 vs 30 Year Mortgage 2026 | Which Is Right for You?

Side-by-Side Comparison: $350,000 Loan at 2026 Rates

Factor	30-Year Fixed (6.75%)	15-Year Fixed (6.10%)
Monthly payment	$2,270	$2,977
Monthly difference	—	+$707/month more
Total paid over life	$817,200	$535,860
Total interest paid	$467,200	$185,860
Interest saved	—	$281,340 saved
Equity at year 5	~$32,000	~$87,000
Equity at year 10	~$64,000	~$203,000 (paid off 5 years)

The bottom line: A 15-year mortgage saves $281,000 in interest on a $350,000 loan, but costs $707 more per month. That's a substantial payment difference — only choose a 15-year if you can comfortably afford it without straining your monthly budget.

Which Is Right for You?

✅ Choose a 15-Year If:

You can afford the ~40% higher payment comfortably
You're in your 40s–50s and want to be mortgage-free before retirement
You have a stable, high income with low other debt
You want to build equity quickly (refinancing into lower rate later)
You're in a high tax bracket (less mortgage interest deduction value anyway)

📋 Choose a 30-Year If:

You need the lower payment for cash flow
You're a first-time buyer with tight margins
You have other high-interest debt to pay off first
You'll invest the payment difference at higher returns
You value the flexibility to pay extra when possible, less when needed

The Hidden Strategy: 30-Year With Extra Payments

Many financial advisors recommend a 30-year mortgage with voluntary extra principal payments. This gives you the best of both worlds: the lower required payment of a 30-year with the ability to pay it off faster when cash flow allows.

On a $350,000 loan at 6.75% (30-year), adding $500/month extra principal reduces the term to approximately 20 years and saves roughly $185,000 in interest. The key advantage: if money gets tight (job loss, medical emergency), you can stop the extra payments. With a 15-year, you're locked into the higher required payment.

Breaking Even: The Math on Interest Savings

Some argue: "Invest the $707 difference between a 15-year and 30-year payment in the stock market and come out ahead." At a 7% average annual return over 15 years, $707/month invested = approximately $235,000. That's less than the $281,000 in interest saved — suggesting the 15-year mortgage wins purely on math at today's 6–7% rates.

At 3% mortgage rates (2020–2021), the math flipped — investing beat paying off a 3% mortgage. At 6–7% rates, accelerating mortgage payoff becomes more competitive with investing.

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Frequently Asked Questions

Is a 15-year or 30-year mortgage better?

Neither is universally better — it depends on your income, cash flow needs, and financial goals. A 15-year saves dramatically on interest (often $200,000+) and builds equity faster. A 30-year offers lower required payments and more flexibility. If you can comfortably afford the 15-year payment, it's usually the better financial choice at today's rates.

How much can I save with a 15-year mortgage?

On a $350,000 loan at 2026 rates, approximately $280,000 in total interest savings over the life of the loan. The savings are even more dramatic on larger loans — a $500,000 loan saves roughly $400,000 in interest. The exact savings depend on your specific rate and loan amount.

Can I pay off a 30-year mortgage early?

Yes, and there's no prepayment penalty on most conventional mortgages. Adding extra principal payments each month reduces your balance faster and shortens the loan term. An extra $500/month on a $350,000 loan pays it off in about 20 years instead of 30 and saves ~$185,000 in interest.

Which loan do lenders prefer?

Lenders have no preference — you qualify for both based on the same criteria. The 15-year's higher payment means you need to qualify for that higher DTI, which can be harder for some borrowers. Otherwise, approval criteria are identical between 15 and 30-year conventional loans.