Your first home starts with a plan
A practical guide to the numbers, the process, and your next big step.
Read the guideComparing 15-Year and 30-Year Mortgages
The loan term determines how long you have to repay your mortgage. A 15-year loan spreads repayment over 180 monthly payments, while a 30-year loan uses 360. For the same amount borrowed at the same rate, the shorter term requires a higher monthly payment but produces less total interest. Compare both the monthly commitment and the full repayment cost before choosing a term.
A 15-year mortgage: faster repayment
A shorter term repays principal more quickly and can reduce lifetime interest. The tradeoff is a larger required payment, leaving less room for other expenses. The CFPB’s guide to mortgage loan options explains this relationship between term, payment, and borrowing cost.
A 30-year mortgage: a lower required payment
Spreading repayment over more years lowers the monthly commitment for the same balance and rate, but generally increases total interest. Consider how the payment fits alongside savings, repairs, other debts, and your regular household spending. A lower payment and a lower total cost are different goals.
An example using this calculator
With a $320,000 loan, an illustrative 15-year rate of 6% produces a monthly principal-and-interest payment of about $2,700.34 and total payments of $486,062. At an illustrative 30-year rate of 6.5%, the payment is about $2,022.62 and the total is $728,142. In this example, the shorter term costs about $677.72 more each month but about $242,080 less over the full repayment period.
These are fixed examples, not current offers. “Total cost” here means loan principal plus interest, assuming the loan runs for its full term. Taxes, insurance, mortgage insurance, closing costs, and points are excluded. The two options use the same loan amount but allow separate quoted rates; the calculation uses unrounded payments before formatting the displayed totals.
Compare the terms with your own plans
Enter written quotes for both terms and review fees as well as rates. If you expect to sell or refinance before the loan ends, the full-term total does not represent what you would pay before that event. For a different approach, explore additional principal payments on a longer loan using the mortgage calculator’s extra-payment options. Confirm any prepayment restrictions with your lender before choosing that strategy.
