Mortgage Calculator: 15 vs 30 Year Loan Comparison
Loan Comparison
15-Year Mortgage
$0.00
Total Paid: $0.00
Total Interest: $0.00
30-Year Mortgage
$0.00
Total Paid: $0.00
Total Interest: $0.00
Metric
15-Year Loan
30-Year Loan
Monthly Principal & Interest
N/A
N/A
Total Paid Over Life of Loan
N/A
N/A
Total Interest Paid
N/A
N/A
Equity Built Faster
Yes
No
Understanding the 15-Year vs. 30-Year Mortgage Trade-off
Choosing the right mortgage term is a pivotal decision in homeownership. The two most common options are the 15-year and the 30-year fixed-rate mortgages. While both offer a fixed interest rate, meaning your principal and interest payment remains the same for the life of the loan, they present distinct financial trade-offs. This calculator helps you visualize these differences based on your specific loan scenario.
The Mathematics Behind the Payments
The monthly mortgage payment (M) is calculated using the following formula, derived from the annuity formula:
$ M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1] $
Where:
P = Principal loan amount (the amount borrowed after the down payment).
i = Monthly interest rate (Annual interest rate divided by 12).
n = Total number of payments over the loan's lifetime (Loan term in years multiplied by 12).
Example Calculation: If you borrow $300,000 at an annual interest rate of 6% for 30 years:
P = $300,000
Annual rate = 6% = 0.06
Monthly rate (i) = 0.06 / 12 = 0.005
Loan term = 30 years
Total payments (n) = 30 * 12 = 360
$ M = 300000 [ 0.005(1 + 0.005)^360 ] / [ (1 + 0.005)^360 – 1] $
$ M \approx \$1,798.65 $
The total amount paid over the life of the loan would be $1,798.65 * 360 = \$647,514$.
The total interest paid would be $647,514 – \$300,000 = \$347,514$.
Key Differences and Considerations:
15-Year Mortgage:
Higher Monthly Payments: Because you're paying off the loan in half the time, your monthly payments will be significantly higher.
Lower Interest Paid: You pay much less interest over the life of the loan because you're borrowing for a shorter period and paying down the principal faster. This is the primary financial advantage.
Build Equity Faster: A larger portion of your early payments goes towards the principal, allowing you to build home equity more rapidly.
Qualification: Lenders may require a higher income or lower debt-to-income ratio to qualify for a 15-year loan due to the larger monthly payment.
30-Year Mortgage:
Lower Monthly Payments: Spreading the loan over 30 years results in more affordable monthly payments, making it accessible to a wider range of borrowers.
Higher Interest Paid: You'll pay substantially more in interest over the loan's lifetime.
Build Equity Slower: A smaller portion of your initial payments goes towards principal, meaning it takes longer to build significant equity.
Flexibility: The lower monthly payment provides more financial flexibility for other expenses, investments, or potential early principal payments (if you choose).
Which is Right for You?
The decision hinges on your financial priorities and circumstances. If you have the financial capacity to handle the higher monthly payments and prioritize saving on interest and building equity quickly, a 15-year mortgage is often the more financially sound choice in the long run. However, if affordability and cash flow are paramount, or if you plan to utilize the saved funds for other investments, a 30-year mortgage offers greater flexibility. Many homeowners with a 30-year mortgage also choose to make extra principal payments when possible to shorten the loan term and reduce total interest paid, effectively getting some benefits of a shorter term without the mandatory higher payment.
function calculateMortgage() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
// — Input Validation —
if (isNaN(loanAmount) || loanAmount <= 0) {
alert("Please enter a valid loan amount.");
return;
}
if (isNaN(interestRate) || interestRate <= 0) {
alert("Please enter a valid annual interest rate.");
return;
}
if (isNaN(downPayment) || downPayment = loanAmount) {
alert("Down payment cannot be greater than or equal to the total loan amount.");
return;
}
var principalAmount = loanAmount – downPayment;
var monthlyInterestRate = interestRate / 100 / 12;
// — Calculations for 15-Year Mortgage —
var term15Years = 15;
var numberOfPayments15y = term15Years * 12;
var monthlyPayment15y = 0;
var totalPaid15y = 0;
var totalInterest15y = 0;
if (monthlyInterestRate > 0) {
monthlyPayment15y = principalAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments15y)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments15y) – 1);
} else {
monthlyPayment15y = principalAmount / numberOfPayments15y;
}
totalPaid15y = monthlyPayment15y * numberOfPayments15y;
totalInterest15y = totalPaid15y – principalAmount;
// — Calculations for 30-Year Mortgage —
var term30Years = 30;
var numberOfPayments30y = term30Years * 12;
var monthlyPayment30y = 0;
var totalPaid30y = 0;
var totalInterest30y = 0;
if (monthlyInterestRate > 0) {
monthlyPayment30y = principalAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments30y)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments30y) – 1);
} else {
monthlyPayment30y = principalAmount / numberOfPayments30y;
}
totalPaid30y = monthlyPayment30y * numberOfPayments30y;
totalInterest30y = totalPaid30y – principalAmount;
// — Display Results —
document.getElementById("monthlyPayment15y").innerText = formatCurrency(monthlyPayment15y);
document.getElementById("totalPaid15y").innerText = formatCurrency(totalPaid15y);
document.getElementById("totalInterest15y").innerText = formatCurrency(totalInterest15y);
document.getElementById("monthlyPayment30y").innerText = formatCurrency(monthlyPayment30y);
document.getElementById("totalPaid30y").innerText = formatCurrency(totalPaid30y);
document.getElementById("totalInterest30y").innerText = formatCurrency(totalInterest30y);
// — Display Comparison Table —
document.getElementById("compMonthly15y").innerText = formatCurrency(monthlyPayment15y);
document.getElementById("compMonthly30y").innerText = formatCurrency(monthlyPayment30y);
document.getElementById("compTotalPaid15y").innerText = formatCurrency(totalPaid15y);
document.getElementById("compTotalPaid30y").innerText = formatCurrency(totalPaid30y);
document.getElementById("compTotalInterest15y").innerText = formatCurrency(totalInterest15y);
document.getElementById("compTotalInterest30y").innerText = formatCurrency(totalInterest30y);
// Highlight which loan builds equity faster (always 15-year)
document.getElementById("compEquityFaster15y").innerText = "Yes";
document.getElementById("compEquityFaster30y").innerText = "No";
}
function formatCurrency(amount) {
if (isNaN(amount) || amount === Infinity) {
return "$0.00";
}
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2,
maximumFractionDigits: 2
});
return formatter.format(amount);
}