When buying a home or refinancing, one of the biggest decisions you’ll make is choosing between a 15-year and 30-year mortgage. Whether you’re looking at homes for sale in Los Angeles, CA or exploring properties in Austin, TX, the loan term you choose can impact your monthly payments, interest costs, and long-term financial goals.
In this Redfin article, we’ll explain how 15-year and 30-year mortgages differ, including payment examples, and when each option makes the most sense.
What’s the difference between a 15-year and 30-year mortgage?
The main difference between a 15-year and 30-year mortgage is how long you have to pay off the loan.
| Feature | 15-year mortgage | 30-year mortgage |
| Loan term | 15 years | 30 years |
| Monthly payment | Higher | Lower |
| Interest rate | Lower | Higher |
| Total interest paid | Lower overall | Higher overall |
| Time to build equity | Faster | Slower |
Because the loan is paid off in half the time, 15-year mortgages come with higher monthly payments, but you save significantly on interest and build equity much faster.
How monthly payments and interest costs compare
Even a slightly higher interest rate over a 30-year term can have a major impact on total interest paid.
Example 1: $400,000 loan
| Term | Estimated interest rate | Monthly payment | Total interest paid |
| 15-year | 5.25% | $3,213 | $178,000 |
| 30-year | ~5.75% | $2,334 | $440,000 |
You’d save roughly $260,000 in interest with a 15-year mortgage, though monthly payments are significantly higher.
Example 2: $250,000 loan
| Term | Estimated interest rate | Monthly payment | Total interest paid |
| 15-year | 5.30% | $2,011 | $112,000 |
| 30-year | 5.80% | $1,467 | $277,000 |
With this smaller loan amount, you’d save about $165,000 in interest by choosing a 15-year term instead of a 30-year term.
Everyone’s financial picture is different. Use our monthly mortgage calculator to compare real numbers based on your home price, down payment, and interest rate.
Rates are for illustrative purposes only and may…