15-Year vs 30-Year Mortgage: What's the Difference?
A 15-year mortgage has higher monthly payments but a lower rate and far less total interest. A 30-year mortgage has lower payments but costs much more over its life.
| 15-year | 30-year | |
|---|---|---|
| $320k at 6.0% / 6.5%: monthly P&I | About $2,700 (6.0%) | About $2,023 (6.5%) |
| Total interest | About $166,000 | About $408,000 |
| Typical rate | Lower | Higher |
| Flexibility | Less room in your monthly budget | More room; you can still prepay |
Bottom line
If the 15-year payment fits comfortably, it saves a lot of interest. Otherwise take the 30-year and make extra principal payments when you can.
Try the Mortgage Calculator