Loan balance over time
| Total of 180 payments | $424,215 |
| Principal | $280,000 |
| Interest | $144,215 |
| Taxes | $0 |
| Insurance | $0 |
| HOA fees | $0 |
15-year against 30-year, by loan size
Principal and interest at this week’s Freddie Mac averages — 5.96% over 15 years, 6.58% over 30.
| Loan | 15-year | 30-year | Extra per month | Interest saved |
|---|---|---|---|---|
| $200,000 | $1,683 | $1,275 | $409 | $155,873 |
| $250,000 | $2,104 | $1,593 | $511 | $194,841 |
| $300,000 | $2,525 | $1,912 | $613 | $233,809 |
| $400,000 | $3,367 | $2,549 | $817 | $311,745 |
| $500,000 | $4,208 | $3,187 | $1,022 | $389,682 |
The last column is the whole argument for a 15-year loan: the same house, tens of thousands less handed to the lender. The column before it is the price of admission — and the reason it does not suit everyone.
See what lenders are quoting on 15-year fixed loans right now, or read the longer comparison in 15- vs 30-year mortgage.
Amortization schedule
| Date | Principal | Interest | Tax, Ins. & HOA | Balance |
|---|---|---|---|---|
| Aug | $966 | $1,391 | $0 | $279,034 |
| Sep | $971 | $1,386 | $0 | $278,063 |
| Oct | $976 | $1,381 | $0 | $277,087 |
| Nov | $981 | $1,376 | $0 | $276,107 |
| Dec | $985 | $1,371 | $0 | $275,121 |
| 2026 | $4,879 | $6,905 | $0 | $275,121 |
| Jan | $990 | $1,366 | $0 | $274,131 |
| Feb | $995 | $1,362 | $0 | $273,136 |
| Mar | $1,000 | $1,357 | $0 | $272,136 |
| Apr | $1,005 | $1,352 | $0 | $271,130 |
| May | $1,010 | $1,347 | $0 | $270,120 |
| Jun | $1,015 | $1,342 | $0 | $269,105 |
15-year mortgage FAQ
- How much more does a 15-year mortgage cost per month?
- Roughly a third more than the same loan over 30 years, though the exact gap moves with the spread between 15- and 30-year rates. It is nowhere near double, because you pay far less interest across the life of the loan, but it is a serious step up and lenders will test whether your income supports it. The comparison table on this page is priced at this week's averages and shows the monthly difference for several loan sizes, so read the figure there rather than relying on a rule of thumb.
- How much interest does a 15-year mortgage save?
- Usually more than half the total interest. Two effects compound: you borrow the money for half as long, and 15-year loans are quoted at a lower rate than 30-year ones, typically half a point to a full point less. On a 300,000 dollar loan the saving commonly runs well past 150,000 dollars over the life of the mortgage. The table above shows the figure for several loan sizes at this week's averages.
- Is a 15-year mortgage a good idea?
- It suits you if the higher payment still leaves room for an emergency fund, retirement contributions and the ordinary surprises of owning a home. It suits you less if it consumes the margin that protects you when the boiler fails or your income dips. A useful middle path is to take the 30-year loan and pay it like a 15-year one voluntarily, which captures much of the saving while leaving you the option to fall back to the smaller required payment.
- Why are 15-year rates lower than 30-year rates?
- Because the lender's money is at risk for half as long. Shorter exposure to inflation, to interest rate moves and to the chance of default is worth something, and lenders price that difference into the rate. The gap moves with the market but has commonly run between a quarter point and a full point.
- Can I pay off a 30-year mortgage in 15 years instead?
- Yes, and on a standard fixed-rate loan there is no penalty for doing so. You will not get the lower 15-year interest rate, so the saving is smaller than a true 15-year loan, but you keep the flexibility of a lower required payment in a bad month. Anything you send above the scheduled payment goes straight against the principal, which is what shortens the term.
- Do I need a larger down payment for a 15-year loan?
- No. The down payment rules are the same, and PMI still applies below 20 percent equity, though it falls away faster because a 15-year loan builds equity much more quickly. What changes is the income test: the larger payment raises your debt-to-income ratio, so some buyers who qualify comfortably for a 30-year loan will not qualify for the 15-year version of the same purchase.
The trade in one sentence
A 15-year mortgage costs noticeably more every month and dramatically less in total. Everything else about the decision is working out whether your budget can absorb the first half of that sentence in order to collect the second.
The table above prices it at this week’s averages across common loan sizes, so you can see both numbers side by side rather than arguing about the principle.
Why the saving is so large
Two effects stack:
- Half the time. Interest accrues on the outstanding balance, and a 15-year loan retires that balance far faster. By year five you own a much bigger share of the house than the 30-year borrower does.
- A lower rate. Lenders quote 15-year loans below 30-year ones because their money is exposed for half as long. The gap moves with the market and has commonly run between a quarter point and a full point.
Together they routinely cut total interest by more than half. On a mid-sized loan that is a six-figure difference — often more than the price of the kitchen you were saving for.
Who it suits, and who it does not
It suits you if the bigger payment leaves your emergency fund, retirement contributions and ordinary maintenance budget intact. Owning a home generates expenses that a mortgage calculator never shows: roofs, boilers, assessments.
It suits you less if the payment consumes exactly the margin that protects you when something breaks or income dips. A mortgage payment is a fixed obligation; savings are flexible. Trading flexibility for interest saving is a real trade, not a free one.
The middle path. Take the 30-year loan and pay it on a 15-year schedule voluntarily. You forgo the lower 15-year rate, so the saving is smaller, but the required payment stays low and you can fall back to it in a bad month without asking anyone’s permission. For many households that optionality is worth more than the rate difference.
Qualifying is the part people miss
The down payment rules do not change, and PMI still applies below 20 percent equity — though it drops off much sooner, since a 15-year loan builds equity quickly.
What does change is the income test. The larger payment pushes up your debt-to-income ratio, and buyers who qualify comfortably for a 30-year loan sometimes do not qualify for the 15-year version of the same house. If that happens, the choice is a shorter term on a cheaper property, or the longer term with extra payments.
Compare current 15-year fixed rates before you decide, see what a given loan size costs monthly on the payment tables, or add taxes, insurance and PMI to the picture with the full mortgage calculator.