Analyze the financial trade-offs with our 15 year versus 30 year mortgage calculator. While the 30-year option lowers your monthly obligation, the 15-year option can save you tens of thousands in total interest costs. Compare both scenarios side-by-side below.
15 Year versus 30 Year Mortgage Calculator
15 Year versus 30 Year Mortgage Calculator Formula
The core logic behind the 15 year versus 30 year mortgage calculator involves running two separate amortization schedules. We calculate the monthly principal and interest (P&I) for both terms and subtract the total cost of the shorter loan from the longer loan.
Total Savings = (Total Interest 30yr) – (Total Interest 15yr)
Variables
- P (Principal): The amount of money borrowed.
- i (Monthly Rate): The annual interest rate divided by 12.
- n (Total Payments): 180 payments for a 15-year loan; 360 payments for a 30-year loan.
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What is the 15 Year versus 30 Year Mortgage Calculator?
This tool is designed to help borrowers make a critical financial decision: should you opt for lower monthly payments or substantial long-term savings? The 15 year versus 30 year mortgage calculator visualizes the “cost of time.”
A 30-year mortgage is the most popular choice because it offers the lowest monthly payment, maximizing your purchasing power. However, a 15-year mortgage typically comes with a lower interest rate and forces you to build equity twice as fast, often saving hundreds of thousands of dollars in interest over the life of the loan.
How to Calculate 15 Year versus 30 Year Mortgage (Example)
- Determine Loan Amount: Enter the total amount you plan to finance (House Price minus Down Payment).
- Input 30-Year Rate: Enter the current market rate for a standard 30-year fixed loan (e.g., 6.5%).
- Input 15-Year Rate: Enter the rate for a 15-year fixed loan. This is usually 0.5% to 0.75% lower than the 30-year rate.
- Compare Totals: The calculator will multiply the monthly payments by the term length (360 vs 180 months) to show the total cost difference.
Frequently Asked Questions (FAQ)
Not always. While it saves money on interest, the higher monthly payment reduces your cash flow flexibility. If you lose your income, the higher payment obligation can be riskier.
Yes. You can get a 30-year loan for the safety of lower required payments, but voluntarily pay extra each month to simulate a 15-year payoff schedule.
On a $300,000 loan, the difference can easily exceed $100,000 in interest savings, depending on the interest rate spread between the two products.
Qualification standards are generally similar, but because the monthly payments are higher, you will need a lower Debt-to-Income (DTI) ratio to qualify for a 15-year loan.