Question 1

Which is better for most people — 15-year or 30-year mortgage?

Accepted Answer

For most people, the 30-year mortgage is the more practical choice because of its lower monthly payment and greater flexibility. Life is unpredictable — job changes, medical emergencies, having children, or deciding to move all become easier to manage when your housing payment is lower. That said, if you can comfortably afford the 15-year payment without straining your budget, it is mathematically superior: you will save tens of thousands in interest and own your home twice as fast.

Question 2

Can I refinance from a 30-year mortgage to a 15-year?

Accepted Answer

Yes, absolutely. Many homeowners start with a 30-year mortgage and refinance to a 15-year term once their income increases or their financial situation improves. When you refinance to a 15-year term, your new payment will be higher than the old 30-year payment, but you will build equity much faster. Keep in mind that refinancing has closing costs (typically 2%–5% of the loan), so make sure you plan to stay in the home long enough to break even on those costs.

Question 3

What if I make extra payments on a 30-year mortgage?

Accepted Answer

Making extra payments on a 30-year mortgage can essentially replicate the result of a 15-year term. For example, on a $300,000 loan at 6.5%, a 30-year payment is about $1,896/month. Adding just $300/month ($3,600/year) in extra principal payments saves approximately $112,000 in interest and cuts 8 years off the loan. This strategy gives you the flexibility of the lower 30-year payment with the savings of a shorter term. Use our Extra Payment Calculator to see your personalized savings.

Question 4

Do 15-year mortgages always have lower interest rates?

Accepted Answer

Generally, yes — 15-year mortgage rates are typically 0.25%–0.5% lower than 30-year rates because the shorter term represents less risk for the lender (they get their money back faster). However, the absolute dollar amount you pay in interest over 15 years is still far less than over 30 years, even with the higher rate on the 30-year term, because of how compound interest works over a longer period.

Question 5

How does property tax and insurance affect the comparison?

Accepted Answer

Property taxes and homeowners insurance are added to your mortgage payment (PITI) and scale roughly with home price rather than loan term. They do not significantly affect which term is better for you — the comparison is primarily about the principal and interest payment. However, these costs are real and must be budgeted for. In high property-tax states like Texas or New Jersey, the difference in P&I between 15 and 30 years is more noticeable than in low-tax states.

15-Year vs 30-Year Mortgage Calculator — Which Saves You More?

Expert Analysis: 15-Year vs. 30-Year Mortgage

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