Quick answer
On a $300,000 loan at today’s averages, a 15-year mortgage at 6.6% costs $2,630 a month in principal and interest against $2,044 for a 30-year loan at 7.24% — $585 more. In return it saves about $262,646 in interest. Paying that same $585 extra on a 30-year loan clears it in 16 years 2 months with about $36,215 more interest than the true 15-year loan, while keeping the lower required payment as a fallback.
Key facts
7.24%
30-year fixed average (Freddie Mac)
Freddie Mac Primary Mortgage Market Survey · Week of Oct 29, 2026
6.6%
15-year fixed average (Freddie Mac)
Freddie Mac Primary Mortgage Market Survey · Week of Oct 29, 2026
The two terms side by side
A mortgage’s loan term sets how many monthly payments it takes to repay. Halving the term does not double the payment, because the payment on a long loan is mostly interest. At today’s Freddie Mac averages the 15-year payment is about 1.29 times the 30-year payment:
| Loan amount | 30-year payment | 15-year payment | Extra a month | 30-year interest | 15-year interest | Interest saved |
|---|---|---|---|---|---|---|
| $200,000 | $1,363 | $1,753 | +$390 | $290,679 | $115,581 | $175,098 |
| $300,000 | $2,044 | $2,630 | +$585 | $436,018 | $173,372 | $262,646 |
| $400,000 | $2,726 | $3,506 | +$780 | $581,357 | $231,162 | $350,195 |
| $500,000 | $3,407 | $4,383 | +$976 | $726,697 | $288,953 | $437,744 |
Property tax, insurance and any PMI come on top and are the same for both terms, so the dollar gap in the full payment is the same — but in percentage terms it looks smaller:
Full monthly payment on a $375,000 home with 20% down
| 30-year at 7.24% | 15-year at 6.6% | |
|---|---|---|
| Principal and interest | $2,044 | $2,630 |
| Property tax (0.89%) | $278 | $278 |
| Homeowners insurance | $153 | $153 |
| Total | $2,476 | $3,061 |
Principal and interest rise 29% with the shorter term, the full payment 24%. If you are weighing a fixed rate against an adjustable one instead, that is a different decision — the fixed vs adjustable-rate guide covers it.
Where the interest savings come from
Two things cut the interest on a 15-year loan. The first is time: the balance is repaid twice as fast, so there is far less balance for interest to accrue on. The 15-year loan also carries a lower rate — 6.6% against 7.24% in Freddie Mac’s latest survey, a gap of 0.64 percentage points, as shorter loans generally carry lower rates.
On the $300,000 example, a 15-year loan at the 30-year rate would already save $243,376, about 93% of the total. The lower rate saves the remaining $19,270, about 7%. In the first year alone, the 30-year borrower pays $21,625 of interest and the 15-year borrower $19,438. The way each payment splits between interest and principal is called amortization.
Equity after 5, 10 and 15 years
The faster payoff shows up as equity long before the loan ends. Here is the balance still owed on the $300,000 loan:
| After | 30-year balance | 15-year balance | 30-year principal repaid | 15-year principal repaid |
|---|---|---|---|---|
| Year 5 | $283,107 | $230,572 | $16,893 | $69,428 |
| Year 10 | $258,872 | $134,087 | $41,128 | $165,913 |
| Year 15 | $224,103 | $0 | $75,897 | $300,000 |
After five years the 15-year borrower owes $52,535 less. That matters if you sell, refinance or want to borrow against the home: more equity means more cash at sale, an earlier end to PMI on a conventional loan and more room under a lender’s loan-to-value limits.
The middle path: a 30-year loan paid down faster
You can get most of the 15-year result without committing to the 15-year payment. Take the 30-year loan and add extra principal each month; if money gets tight, drop back to the required payment.
$300,000 at 7.24% for 30 years, paid to an earlier date
| Paid off in | Payment needed | Extra over the required $2,044 | Total interest | Saved vs the regular 30-year schedule |
|---|---|---|---|---|
| 25 years | $2,166 | $122 | $349,946 | $86,072 |
| 20 years | $2,369 | $325 | $268,635 | $167,383 |
| 15 years | $2,737 | $692 | $192,642 | $243,376 |
Paying the 30-year loan off in 15 years costs $19,270 more in interest than a true 15-year loan — the same figure as the rate effect above, because the only difference left is the rate. Think of that as the price of flexibility: the lower required payment protects you if income drops. If the 30-year and 15-year averages move closer together, that price shrinks.
Two things to check before using this approach. Make sure extra payments go to principal, not to next month’s payment; and check your loan for a prepayment penalty — on a Qualified Mortgage it can apply only in the first 3 years, capped at 2% of the amount prepaid in the first two years and 1% in the third. The extra payment calculator with these numbers shows the full schedule.
How the term changes the house you qualify for
Lenders qualify you on the required payment, so the 15-year loan’s higher payment buys a smaller home on the same income. For a $100,000 household with 10% down, property tax at 0.89%, insurance at $4.90 per $1,000 and PMI at the midpoint of Freddie Mac’s range:
| Budget | A month | 30-year price | 15-year price | Difference |
|---|---|---|---|---|
| Freddie Mac housing guideline (30%) | $2,500 | $323,000 | $263,000 | −$60,000 (19%) |
| Freddie Mac total-debt guideline (45%) | $3,750 | $485,000 | $395,000 | −$90,000 (19%) |
At the comfortable budget the 15-year term costs about $60,000 of purchase price. That is why many buyers qualify on a 30-year loan and prepay, or start with a 30-year loan and refinance to a shorter term later when their income has grown. The $100,000 affordability post runs the 30-year math with debts included.
What less interest means at tax time
Mortgage interest is deductible only if you itemize, and only on up to $750,000 of mortgage debt for loans taken out after December 15, 2017. A shorter term means less interest, and so a smaller possible deduction — but for many households the deduction never comes into play. On the $300,000 example, first-year interest is $21,625 on the 30-year loan and $19,438 on the 15-year loan — both below the $32,200 standard deduction for a married couple filing jointly, so a couple with few other deductions would get no tax benefit from either. Treat any tax effect as a detail, not a reason to pick the longer loan.
Which term fits which situation
- The 15-year loan suits buyers whose budget easily covers the higher payment with savings intact, who want the lowest total cost and a paid-off home by a set date — before retirement, for example.
- The 30-year loan suits buyers who need the lower payment to qualify, have irregular income, or would rather keep cash for an emergency fund, retirement contributions or higher-rate debt.
- The 30-year loan with extra payments suits buyers who want much of the 15-year saving but value a fallback. It only works if you actually make the extra payments.
Questions to settle before you choose
Price both terms on the same day
Ask each lender for Loan Estimates on a 15-year and a 30-year loan so the rates and fees are comparable.
Run your budget on the 15-year payment
Check that it leaves room for savings, retirement contributions and irregular costs, not just the lender’s ratio.
Check your emergency cushion
A higher required payment is harder to cover in a bad month; the 30-year loan keeps that risk lower.
Compare against the middle path
Work out the extra payment that would clear a 30-year loan in your target years, and decide whether you would really make it.
Decide what the saved interest is worth to you
Weigh the interest saved against the flexibility and the house you can buy.
If you go with the 30-year loan and prepay, the schedule matters too — the biweekly payments post compares paying every two weeks with adding a little each month.
Frequently asked questions
Is a 15-year mortgage worth it?
It is if the higher payment fits your budget comfortably. On a $300,000 loan at today’s averages it costs $585 more a month and saves about $262,646 in interest. If the payment would leave you without savings, a 30-year loan with voluntary extra payments is safer.
Why is the 15-year rate lower than the 30-year rate?
Lenders take less risk on a shorter loan: there is less time for rates to move or for the borrower’s situation to change. Freddie Mac’s latest averages are 6.6% for 15 years and 7.24% for 30 years.
Can I pay a 30-year mortgage off in 15 years?
Yes. On a $300,000 loan at 7.24%, paying $2,737 a month instead of $2,044 clears it in about 15 years. You pay more interest than on a true 15-year loan at 6.6% — about $19,270 here — but you can drop back to the lower payment at any time.
Does a 15-year mortgage make it harder to qualify?
Yes, because lenders use the required payment. On $100,000 a year with 10% down, the 15-year term lowers the price you can afford at a 30% housing budget by about $60,000.
Should I refinance from a 30-year to a 15-year loan?
It can save interest if the new rate and closing costs make sense and the higher payment fits. Compare the saving with the cost of refinancing and how long you will keep the loan, and see the refinancing guides for the break-even math.
Is PMI different on a 15-year loan?
PMI works the same way on both terms, but a 15-year loan reaches the point where it can be cancelled — 80% of the original value — much sooner because the balance falls faster.
Sources
- Freddie Mac Primary Mortgage Market Survey — 30-year fixed rate, national weekly average; 15-year fixed rate, national weekly average (Week of Oct 29, 2026)
- US Census Bureau, American Community Survey 2024 1-year — Effective property tax rate (median taxes ÷ median home value) (2024 ACS 1-year)
- Freddie Mac Research — Average homeowners insurance premium per $1,000 of home value (2023 data)
- Freddie Mac My Home — Typical PMI cost, low end; Typical PMI cost, high end (Oct 28, 2026)
- Freddie Mac My Home — Freddie Mac guidance: housing costs below this share of gross income; Freddie Mac guidance: total debt payments below this share of gross income (Jan 22, 2026)
- IRS — 2026 standard deduction, married filing jointly (Tax year 2026)
- 12 CFR 1026.43(g) — Prepayment penalty may not apply after this many years (qualified mortgages); Maximum prepayment penalty in the first two years (share of balance prepaid); Maximum prepayment penalty in the third year (share of balance prepaid) (Oct 28, 2026)
- IRS Publication 936 — Mortgage debt on which interest is deductible (loans after Dec 15, 2017) (Tax year 2025)
- CFPB — Longest term allowed on a Qualified Mortgage (Jan 7, 2025)
- CFPB — Ask your servicer to cancel PMI at this share of original value (Oct 28, 2026)
- CFPB: Understand the different kinds of loans available
- CFPB: Explore interest rates
Last reviewed Figures are checked against the sources above. Read our editorial policy. This page is general information, not financial advice — see the disclaimer.