15 vs 30 Year Mortgage Calculator

The fifteen-year mortgage wins on arithmetic and the thirty-year wins on flexibility, and most of the disagreement about which is better comes from people weighting those two things differently rather than from anyone being wrong about the numbers.

The interest saving is real and usually enormous — often more than half the total interest, because you are borrowing for half as long and typically at a lower rate. Shorter terms price better because the lender's exposure to rate and default risk is compressed, and the spread has historically run around half a percentage point. Compounding that saving over the loan makes the fifteen-year look overwhelming on paper.

The counter-argument is the invest-the-difference case: take the thirty-year, put the payment gap into the market every month, and if returns exceed your mortgage rate you end up ahead. This is mathematically sound and practically fragile. It requires investing the difference every month for fifteen years without ever diverting it, and most people who intend to do this end up spending it instead. If you would not genuinely automate the investment, the comparison is not real.

The point the spreadsheet cannot capture is what happens when income stops. A thirty-year mortgage paid aggressively gives you the fifteen-year outcome with an escape hatch — in a bad year you drop back to the required payment and keep your home. A fifteen-year mortgage locks in the higher payment as an obligation. For anyone with variable income or a thin emergency fund, that optionality is worth more than the rate spread.