15 vs 30-year Mortgage Calculator

When it comes to purchasing a home, one of the most important decisions you’ll make is choosing the length of your mortgage loan.

Two of the most common options are 15-year and 30-year mortgage loans. A 15-year mortgage loan offers a shorter repayment term, which means that you’ll pay less in interest over time but will have higher monthly payments. On the other hand, a 30-year mortgage loan has a longer repayment term, which results in lower monthly payments but higher interest paid over time.

To help you make an informed decision, our 15 vs 30 year mortgage calculator can estimate the cost of each option.

Whether you’re planning to purchase your first home or move into a new one, having a sizable down payment can significantly impact your mortgage terms and overall financial stability. To help navigate this process, it’s essential to set a clear savings goal. You can use a savings goal calculator to take the first step toward turning your homeownership dreams into a tangible financial plan.

15-Year Mortgage

Pros

• Faster Equity Buildup: With a 15-year mortgage, equity builds up rapidly, significantly shortening the time to full homeownership. By using a 15 year vs 30 year mortgage calculator, you can see the equity build up faster.
• Lower Interest Rates: Generally, 15-year mortgages come with lower interest rates, leading to less interest paid over the life of the loan.
• Total Interest Paid: Due to the shorter duration, the total interest paid over the life of the loan is significantly lower compared to a 30-year mortgage. You can calculate the difference in total interest paid by using a 15-year vs 30-year mortgage calculator.
• Forced Savings: The higher monthly payments can act as a form of forced savings, helping you pay off your mortgage faster and potentially save on interest.

Cons

• Higher Monthly Payments: The main drawback is the higher monthly payments, as the loan is paid off in half the time of a 30-year mortgage.
• Less Flexibility: Committing to higher monthly payments may limit your financial flexibility, making it harder to adapt to unexpected expenses or changes in income.

30-Year Mortgage

Pros

• Lower Monthly Payments: The extended loan term results in lower monthly payments, making homeownership more affordable.
• Increased Flexibility: Lower monthly payments provide more financial flexibility, allowing you to allocate funds to other investments or expenses.
• Tax Deductibility: The interest paid on a 30-year mortgage may be tax-deductible, providing potential tax benefits. A tax professional may help you understand specific implications based on your financial situation.
• Easier to Qualify: The lower monthly payments make it easier for borrowers to qualify for a higher loan amount.

Cons

• Higher Total Interest Paid: Over the life of the loan, a 30-year mortgage will accumulate more interest, resulting in a higher overall cost of homeownership. You can calculate the difference in total interest paid by using a 30-year vs 15-year mortgage calculator.
• Slower Equity Buildup: It takes longer to build equity in your home with a 30-year mortgage, as a significant portion of the early payments goes towards interest. Use a 30 year vs 15 year mortgage calculator to see the difference in how quickly equity builds up.
• Higher Interest Rates: While 30-year mortgages may have higher interest rates than 15-year mortgages, the difference may vary based on market conditions.

Ultimately, the choice between a 15-year and a 30-year mortgage depends on your financial goals, risk tolerance, and current financial situation. Using a 15-year vs 30-year mortgage calculator can help you compare the costs and benefits of each option and make an informed decision of how much house you can afford.