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

15 vs 30-Year Mortgage

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

On a $400K mortgage, the 15-year saves ~$200K in lifetime interest. But the monthly payment is $1,200 higher. Can you afford it AND still invest?

Verdict

Take the 30-year and invest the difference if disciplined; the math typically favors investing the $1,200/month into an index fund at 7%+ over locking in a 6% mortgage paydown. Take the 15-year if you want guaranteed debt freedom and lack investing discipline.

Side-by-side comparison

 15-Year30-Year
Rate spread (typical)~0.5% lowerHigher rate
Monthly payment ($400K)~$3,400~$2,400
Lifetime interest ($400K)~$110K~$320K
Equity after 5 years~$135K paydown~$30K paydown
Investment flexibilityLowerHigher
Best forHigh earners, debt-averseDisciplined investors, growing income

Who should pick 15-Year

Anyone over 50 wanting to retire mortgage-free. High earners with stable income. Anyone who hates debt psychologically. Buyers who can afford the higher payment without sacrificing 401(k) match.

Who should pick 30-Year

Younger buyers with growing income. Disciplined investors who will actually invest the difference (not spend it). Anyone for whom the higher payment would prevent retirement savings.

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Disclaimer. Comparison numbers depend on your tax bracket, state, and time horizon. Educational only — not personalized financial advice. See our Financial Disclaimer.

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