15 vs. 30 Year Mortgage
The 15-year saves on interest but the monthly difference invested at market returns can outpace those savings. The answer depends on how long you stay.
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Rates (enter actual quoted rates)
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Assumptions
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15yr Monthly Payment
$2,700.34
6% rate
30yr Monthly Payment
$2,022.62
6.5% rate
Monthly Difference
$677.72
extra per month for 15yr
If Monthly Diff Invested
$117,304
at 7% over 10 years
Full-Term Comparison
15-Year Mortgage
Monthly payment
$2,700.34
Total interest (full term)
$166,062
Total paid (full term)
$486,062
Balance at year 10
$139,677
Interest saved vs 30yr
$242,081
30-Year Mortgage
Monthly payment
$2,022.62
Total interest (full term)
$408,142
Total paid (full term)
$728,142
Balance at year 10
$271,284
Opportunity cost value
$117,304
Sensitivity: How Years in Home Changes the Decision
| Years in Home | Winner | Net Benefit (30yr Opp Cost - 15yr Interest Savings) |
|---|---|---|
| 3 yrs | 30yr + Invest | +$19,641 |
| 5 yrs | 30yr + Invest | +$32,858 |
| 7 yrs | 30yr + Invest | +$46,273 |
| 10 yrs | 30yr + Invest | +$67,024 |
| 15 yrs | 30yr + Invest | +$104,614 |
| 20 yrs | 30yr + Invest | +$175,549 |
| 25 yrs | 30yr + Invest | +$324,908 |
| 30 yrs | 30yr + Invest | +$584,723 |
The 15-year mortgage wins on pure interest savings. The 30-year wins if you consistently invest the monthly difference at a return exceeding your mortgage rate. Most people don't. Discipline matters. The break-even horizon where 30yr investing catches up depends on your actual investment return.