Morsimo
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Key takeaways
- On $300,000 at the same 6.5% rate, the 15-year payment is $2,613.32 and the 30-year is $1,896.20, a difference of $717.12 a month.
- Total interest is about $170,398 on the 15-year and $382,633 on the 30-year, a saving of about $212,235.
- 15-year loans usually carry a lower rate, which widens the saving, but the higher payment affects how much you can qualify for.
- A 30-year loan with extra payments gives you a similar payoff with more flexibility.
Side-by-side on a $300,000 loan
| 30-year, 6.5% | 15-year, 6.5% | 15-year, 5.75% | |
|---|---|---|---|
| Monthly principal & interest | $1,896.20 | $2,613.32 | $2,491.23 |
| Total interest | $382,633 | $170,398 | $148,421 |
| Interest saved vs 30-year | – | $212,235 | $234,212 |
| Extra per month vs 30-year | – | $717.12 | $595.03 |
The third column is an illustration of a lower 15-year rate, not a quote or a forecast. Rates change daily and depend on your credit and loan type. Enter real quotes in the calculator.
Why the 15-year saves so much
A shorter term means the balance falls faster, so less interest is charged on it, and each payment sends more to principal. See how amortization works for the month-by-month split.
What the 30-year gives you
- A lower required payment, which makes it easier to qualify and leaves room in the budget.
- Flexibility: you can pay extra when money is available and fall back to the lower payment when it is not. See how extra payments work.
- Cash for other goals, such as an emergency fund, retirement contributions or paying off higher-rate debt. Whether investing the difference beats paying the loan down depends on returns that nobody can promise.
Who the 15-year suits
People with stable income who can comfortably afford the higher payment, already have an emergency fund, and value being debt-free sooner. Check that the payment still fits after taxes, insurance and any PMI; see the full payment breakdown.
Middle options
You can take a 30-year loan and pay it like a shorter one, use a 20-year term, or switch to bi-weekly payments. Lenders may price each term differently, so compare quotes.
Fixed-rate examples; figures are estimates for planning, not loan offers.