30 Year vs 15 Year Mortgages: Which is Best?

Dated: February 27 2023

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For most people, buying a home is the most significant purchase they will make in their lifetime. As such, it's essential to consider all available options when deciding on the best mortgage product. Two of the most popular mortgage options available in the market are 30-year and 15-year mortgages. In this blog, we will compare the two options, highlighting the benefits and drawbacks of each.

Monthly Payments

One of the most significant differences between a 30-year mortgage and a 15-year mortgage is the monthly payments. A 30-year mortgage will have lower monthly payments as the loan amount is spread over a more extended period. In contrast, a 15-year mortgage has higher monthly payments as the loan amount is divided over a shorter period. A higher monthly payment may be challenging for some borrowers, but it also means they will pay off the mortgage faster.

Total Interest Paid

The total interest paid is the amount of interest a borrower will pay over the life of the loan. With a 30-year mortgage, borrowers have a more extended period to pay off the loan, which means they will pay more interest over time. On the other hand, with a 15-year mortgage, borrowers will pay less interest over the life of the loan. While the interest rates for both loans may be the same, the total interest paid on a 15-year mortgage will be lower than that of a 30-year mortgage.

Equity Buildup

Equity refers to the amount of the home that a homeowner actually owns. With a 15-year mortgage, the homeowner will build equity faster because they are making higher payments. Homeowners with a 30-year mortgage may not build equity as quickly as their counterparts with a 15-year mortgage. A higher equity percentage means the homeowner has more value in their home, which can be beneficial if they need to sell the home or want to borrow against it.


A 30-year mortgage offers more flexibility than a 15-year mortgage. With a lower monthly payment, borrowers have more cash flow available to cover other expenses, save for emergencies, or invest in other opportunities. Additionally, a 30-year mortgage provides borrowers with the option to make extra payments or pay off the mortgage early without penalty. This flexibility can be particularly useful for borrowers who experience changes in their financial situation.


The cost of a 15-year mortgage is typically lower than a 30-year mortgage because the interest rate is usually lower. However, the monthly payment on a 15-year mortgage is higher. It's essential to consider the upfront costs of both options, such as closing costs, and compare them to determine the total cost of each option. A lower interest rate may save borrowers money over time, but a higher monthly payment may be challenging for some.

Which Option is Right for You?

Choosing between a 30-year mortgage and a 15-year mortgage depends on individual financial goals and circumstances. A 30-year mortgage may appeal more to borrowers looking for lower monthly payments and more flexibility. A 15-year mortgage may be better suited for borrowers who want to pay off their mortgage quickly and build equity faster. Ultimately, the decision comes down to personal preference and financial goals.

In Conclusion

When it comes to choosing between a 30-year mortgage and a 15-year mortgage, it's important to consider all the factors. Each option has its benefits and drawbacks, and borrowers should weigh them against their financial goals and circumstances. Whatever option you choose, make sure you understand the terms of the loan and can make the monthly payments on time.  As always, you can contact us if you would like to discuss this or any other home-buying topic in greater detail! For a little more information on loan programs, check out our YouTube channel!

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Billy Daniel

After investing in real estate for several years, I decided to get my real estate license so that I could more directly help others navigate the exciting, and sometimes frustrating, world of real esta....

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