🗓 Should I get a 15 year or 30 year mortgage?

Choosing between a 15-year and 30-year mortgage is a major financial decision. A 15-year term builds equity faster and saves tens of thousands in interest, but the 30-year offers lower payments and the chance to invest the difference. This calculator compares both paths to see which strategy builds more wealth over three decades.

The CFPB notes that shorter loan terms generally save you money overall but carry higher monthly payments. You borrow and pay interest for a shorter time, and the 15-year interest rate is usually lower—by as much as a full percentage point.

However, a 15-year loan locks you into that higher payment. If money gets tight, you cannot easily shrink a 15-year payment. The 30-year offers flexibility, as you can always pay extra when you want.

If you take the 30-year loan, you could invest the monthly payment savings. If your expected investment return outpaces your mortgage rate, the 30-year path might actually leave you richer after three decades.

This comparison assumes steady investment returns and ignores taxes on gains or the mortgage-interest deduction. It also assumes you have the strict discipline to invest the difference every single month without fail.

For further related reading, check out:

• Understand the different kinds of loans available | Consumer Financial Protection Bureau
• Mortgage Rates