15-Year Mortgage Calculator
A 15-year fixed-rate mortgage lets you own your home faster and save tens of thousands of dollars in interest. Calculate your payment and see the savings compared to a 30-year loan.
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Interest Savings: Why a 15-Year Mortgage Saves You Thousands
The 15-year mortgage offers two powerful advantages that compound together:
- Lower interest rates — lenders typically offer rates 0.50% to 0.75% lower for 15-year terms because the shorter duration reduces their risk. This means less interest accrues on every dollar you borrow.
- Half the time for interest to accumulate — with only 180 payments instead of 360, interest has far less time to compound. The combination of a lower rate and fewer payments means you typically pay less than one-third the total interest of a 30-year loan.
- Faster equity building — from the very first payment, a larger portion goes to principal. You build equity rapidly, giving you more financial options and security.
The trade-off is a significantly higher monthly payment — typically 40% to 50% more than a 30-year loan for the same amount. This is why the affordability check below is essential before committing to a 15-year term.
15-Year vs. 30-Year Comparison: $280,000 Loan
Here is a side-by-side comparison for a $280,000 loan to illustrate the differences:
| Metric | 15-Year at 5.75% | 30-Year at 6.50% | Difference |
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While the 15-year payment is higher each month, the total savings in interest are substantial. The question is whether the higher monthly payment fits comfortably within your budget.
Who Benefits Most from a 15-Year Mortgage?
A 15-year mortgage is often the best choice for borrowers who meet these criteria:
- Stable, higher income — if the 15-year payment is no more than 25% of your gross monthly income, you can handle the higher obligation without financial strain.
- Already saving adequately for retirement — do not sacrifice retirement contributions to afford a 15-year payment. The mortgage interest savings rarely outweigh decades of missed investment growth.
- Nearing retirement — if you are 50 or older, a 15-year mortgage ensures you own your home outright before retirement, eliminating a major expense from your fixed-income years.
- Refinancing from a 30-year — if you have been in a 30-year mortgage for several years and rates have dropped, refinancing into a 15-year can accelerate payoff without drastically increasing your payment.
Frequently Asked Questions
How much do you save with a 15-year vs. 30-year mortgage?
On a $280,000 loan, a 15-year mortgage at 5.75% saves you roughly $230,000 or more in total interest compared to a 30-year at 6.50%. The exact savings depend on your loan amount and rates, but 15-year borrowers typically pay less than one-third the total interest of a 30-year loan.
What income do you need for a 15-year mortgage?
Lenders generally want your total housing payment (principal, interest, taxes, and insurance) to be no more than 28% of your gross monthly income. For a $280,000 loan at 5.75% on a 15-year term, the principal and interest payment alone is approximately $2,327. Adding taxes and insurance could bring the total to around $2,800 to $3,100, suggesting a household income of at least $120,000 to $130,000 per year.
Can I refinance to a 15-year mortgage?
Yes, refinancing from a 30-year to a 15-year mortgage is a common strategy, especially when interest rates drop. If you have been paying on a 30-year loan for 5 to 10 years, your remaining balance is lower and the 15-year payment may be surprisingly affordable. Factor in closing costs (typically 2% to 5% of the loan amount) to ensure the total savings justify the refinance.
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Compare Mortgage Rates
Even a small difference in interest rates can save you thousands over the life of your loan. Before committing to a mortgage, consider comparing offers from multiple lenders to find the best rate and terms for your financial situation.
What to Look For When Comparing Mortgage Rates
Even a 0.25% difference in your mortgage rate changes your total interest paid by tens of thousands of dollars over a 30-year term. When evaluating lenders, consider these factors alongside the headline rate:
- APR vs. interest rate — the APR includes origination fees and gives a more accurate total-cost comparison across lenders
- Points — paying discount points upfront lowers your rate but extends the break-even period; worthwhile only if you stay in the home long enough
- Fixed vs. adjustable — ARMs start lower but carry rate-reset risk after the initial period; fixed rates offer long-term payment certainty
- Lender type — banks, credit unions, and online lenders each offer different rate structures, underwriting timelines, and service models
- Rate lock period — confirm how long the quoted rate is guaranteed during the underwriting process before you are committed