Mortgage Calculator 15 vs 30

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Reviewed by David Chen, CFA • Financial Analysis Specialist
Updated: October 2023 | Fact Checked

Comparing a 15-year vs. 30-year fixed-rate mortgage is crucial for your long-term financial health. Use this tool to calculate your monthly payments, total interest savings, and determine which loan term fits your budget.

Mortgage Calculator 15 vs 30

Interest Savings with 15-Year
$0.00

Mortgage Calculator 15 vs 30 Formula

M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]

Formula Source: Investopedia – Mortgage Mechanics

Variables:

  • M: Total monthly mortgage payment.
  • P: Principal loan amount (Home Price – Down Payment).
  • i: Monthly interest rate (Annual Rate / 12 months).
  • n: Number of months (180 for 15 years, 360 for 30 years).

What is a Mortgage Calculator 15 vs 30?

A 15 vs 30 mortgage calculator is a financial tool designed to compare the two most common mortgage terms. While a 30-year mortgage offers lower monthly payments, a 15-year mortgage typically features a lower interest rate and results in significantly less interest paid over the life of the loan.

The primary purpose of this comparison is to help borrowers decide between cash flow (30-year) and equity building (15-year).

How to Calculate Mortgage 15 vs 30 (Example)

  1. Determine Principal: Subtract your down payment from the home price. (e.g., $400k – $80k = $320k).
  2. Convert Rates: Divide the annual interest rates by 12. (e.g., 6% / 12 = 0.005).
  3. Apply Formula for 30yr: Use n=360 to find the monthly payment.
  4. Apply Formula for 15yr: Use n=180 to find the monthly payment.
  5. Compare Total Interest: (Monthly Payment × Total Months) – Principal.

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Frequently Asked Questions (FAQ)

Is a 15-year mortgage always better?

Mathematically, yes, because you pay much less interest. However, the higher monthly payment can strain your budget if your income is unstable.

Why are 15-year rates lower?

Lenders view shorter terms as lower risk because the principal is paid back faster, and market fluctuations have less time to impact the loan.

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

Yes, by making extra principal payments. This gives you the flexibility of lower required payments while achieving 15-year savings.

What is the biggest disadvantage of a 15-year loan?

The “opportunity cost.” The extra money spent on monthly payments could potentially be invested in the stock market for higher returns.

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