A 15-year mortgage is a home loan that you repay over 15 years. Compared to a 30-year mortgage, it typically features a higher monthly payment but significantly less interest paid over the life of the loan. This makes it an attractive option for borrowers who can afford the higher payments and want to become debt-free sooner while saving a substantial amount on interest.
How is the Monthly Payment Calculated?
The monthly mortgage payment (principal and interest) for a fixed-rate loan is calculated using the following formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly mortgage payment (principal and interest)
P = The principal loan amount (the amount you borrowed)
i = Your monthly interest rate. This is calculated by dividing your annual interest rate by 12 (e.g., 4.5% annual rate becomes 0.045 / 12 = 0.00375 monthly).
n = The total number of payments over the loan's lifetime. For a 15-year mortgage, this is 15 years * 12 months/year = 180 payments.
Key Differences: 15-Year vs. 30-Year Mortgage
Interest Savings: The primary advantage of a 15-year mortgage is the substantial interest savings. By paying off the loan in half the time, you avoid many years of interest accrual.
Higher Monthly Payments: Because you are paying off the loan principal faster, the monthly payments are higher than for a comparable 30-year mortgage.
Faster Equity Building: With higher principal payments each month, you build equity in your home more quickly.
Shorter Commitment: You will be mortgage-free in 15 years instead of 30.
When to Choose a 15-Year Mortgage:
You can comfortably afford the higher monthly payments.
You want to save a significant amount on interest over the life of the loan.
You aim to pay off your mortgage sooner and build equity rapidly.
You have a stable income and expect your financial situation to remain secure.
Use this calculator to estimate your potential monthly payments for a 15-year mortgage. Remember that this calculation typically excludes property taxes, homeowners insurance, and potential Private Mortgage Insurance (PMI), which will increase your actual total monthly housing expense.
function calculateMortgage() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
// Validate inputs
if (isNaN(loanAmount) || isNaN(annualInterestRate) || loanAmount <= 0 || annualInterestRate <= 0) {
alert("Please enter valid positive numbers for Loan Amount and Annual Interest Rate.");
return;
}
var monthlyInterestRate = annualInterestRate / 100 / 12;
var numberOfPayments = 15 * 12; // 15 years * 12 months/year
// Calculate monthly payment using the mortgage payment formula
// M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
var numerator = monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments);
var denominator = Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1;
var monthlyPayment = loanAmount * (numerator / denominator);
// Calculate total interest and total payment
var totalPayment = monthlyPayment * numberOfPayments;
var totalInterest = totalPayment – loanAmount;
// Display the results, formatted to two decimal places
document.getElementById("monthlyPayment").textContent = "$" + monthlyPayment.toFixed(2);
document.getElementById("totalInterest").textContent = "Total Interest Paid: $" + totalInterest.toFixed(2);
document.getElementById("totalPayment").textContent = "Total Paid Over Life of Loan: $" + totalPayment.toFixed(2);
}