15-Year vs 30-Year Mortgage
The choice between 15-year and 30-year fixed mortgages is the biggest single financial decision for most homebuyers. The 15-year saves enormous total interest but doubles the monthly payment relative to the principal portion. The 30-year preserves cash flow flexibility at the cost of higher lifetime interest. Most buyers should at least run the math both ways.
15-Year Fixed Mortgage
Pays off in 15 years with higher monthly payment but dramatically lower total cost.
Best for: Buyers with strong cash flow, financial discipline, and a goal to be debt-free quickly.
Pros
- +Lower rate (typically 0.5-0.75% below 30-year)
- +Massive total interest savings (often 60-65% less)
- +Builds equity 3-4x faster
- +Mortgage paid off in 15 years
Cons
- −Higher monthly payment (~50% more than 30-year)
- −Less cash flow flexibility for other goals
- −Less mortgage interest deduction (smaller tax shield)
30-Year Fixed Mortgage
Lower monthly payment over 30 years; flexibility but higher lifetime cost.
Best for: Most buyers - especially those prioritizing cash flow flexibility, savings, or other investments.
Pros
- +Lower monthly payment
- +Cash flow flexibility for other priorities (retirement, education, business)
- +Larger tax shield via mortgage interest
- +Can pay extra to mimic 15-year acceleration when desired
Cons
- −Higher rate than 15-year
- −Roughly 2-3x more total interest paid over the loan life
- −Slower equity build
| Field | 15-Year Fixed Mortgage | 30-Year Fixed Mortgage |
|---|---|---|
| Min FICO | 620+ (best pricing 740+) | 620+ (best pricing 740+) |
| LTV (purchase) | Up to 95% | Up to 97% |
| LTV (cash-out) | Up to 80% | Up to 80% |
| Income docs | Standard | Standard |
| Term | 15-year fixed | 30-year fixed |
| Time to close | 30-45 days | 30-45 days |
Which one should you choose?
- 15-Year Fixed Mortgage: choose 15-year if you have strong cash flow, want to be debt-free quickly, AND are already maxing tax-advantaged retirement accounts.
- 30-Year Fixed Mortgage: choose 30-year for most scenarios - flexibility and the ability to invest the payment-difference often beats forced acceleration.
- A common hybrid: take 30-year and pay extra principal monthly to mimic 15-year while keeping flexibility to drop to minimum payment if income drops.
Frequently asked questions
How much more is a 15-year payment vs 30-year?
Typically 40-60% more. Example: $400K loan at 6.5% (30-year) vs 6% (15-year): 30-year P&I = $2,528, 15-year P&I = $3,375 - about 33% more on this scenario.
Should I refinance from 30-year to 15-year?
Math works if you have meaningfully higher income than when you originated. Otherwise, just paying extra on a 30-year often achieves the same goal with more flexibility.
Are 20-year mortgages available?
Less common but available. 20-year offers a middle ground - rate slightly below 30-year, payment slightly above 30-year, faster payoff than 30-year.
Not sure which fits your scenario?
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Today's mortgage rates
Conventional
6.250%
6.288% APR
FHA
5.750%
5.780% APR
VA
5.750%
5.780% APR
Conv: 80% LTV, 780 FICO. FHA: 96.5% LTV, 680 FICO. VA: 100% LTV, 680 FICO. 30-yr fixed. Your rate may vary.