Frequently Asked Questions
Should I take a 15-year or 30-year mortgage?
A 15-year mortgage has roughly 50% higher monthly payment but cuts total interest paid by 60%–70%. On a $350,000 loan, the 30-year at 6.75% costs about $466,000 in interest; the 15-year at 6.00% costs only $182,000 - a $284,000 difference. The 30-year offers payment flexibility (lower required, ability to invest the difference); the 15-year offers forced savings and faster equity build-up.
How much lower is the 15-year rate?
Historically, 15-year rates run 0.50%–0.75% below 30-year rates. In 2026 with 30-year averaging around 6.5%–7.0%, expect 15-year rates of 5.75%–6.25%. The spread reflects lower default risk and shorter rate exposure on the lender side.
What if I take the 30-year and invest the savings?
In theory, investing the monthly payment difference in stocks could beat the interest saved on a 15-year - at long-run 7% real equity returns, the math often favors the 30-year + invest strategy. In practice, most people don't actually invest the difference consistently, which is why a 15-year acts as forced savings. Financial behavior usually matters more than the math.
Can I just make extra payments on a 30-year?
Yes - and this gives you the best of both worlds. Take a 30-year for payment flexibility, then voluntarily pay it off in 15 years by adding extra principal. The only "cost" is the rate spread (0.5%–0.75%), which on $350,000 is about $12,000–$18,000 in extra interest over 15 years. Many borrowers consider that a reasonable price for flexibility.
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This calculator provides estimates for informational purposes only. Actual financial outcomes depend on market conditions, personal circumstances, and decisions. Not financial advice. Consult a certified financial planner before making financial decisions affecting your future.