15 vs 30-year mortgage: the payment, the interest and the middle path

On a $320,000 loan at this week's US averages, a 15-year mortgage costs $615.69 a month more than a 30-year one and saves $283,283 of interest. Why the gap is that large, how fast each loan builds equity, and what happens if you take the 30-year loan and pay it like a 15-year one.

Oct 2, 2026 · By Calcelate Team

Buy a $400,000 home with 20% down and you borrow $320,000. At this week’s US average rates, a 30-year fixed loan costs $2,189.48 a month and a 15-year fixed loan costs $2,805.17. The 15-year loan asks for $615.69 more every month. In return it is paid off in half the time and costs $283,283 less in interest.

That is the whole trade. The rest of this article is about the size of each side: where the saving comes from, how quickly each loan turns into home equity, and whether there is a way to get most of the saving without signing up for the higher payment.

Payment and interest side by side

Over 30 years you pay $468,213 of interest on top of the $320,000 you borrowed, so the house costs $788,213 before tax and insurance. Over 15 years the interest is $184,930. More than half of what the 30-year borrower pays goes to interest; for the 15-year borrower it is a little over a third.

The rates come from Freddie Mac’s Primary Mortgage Market Survey for the week of October 1, 2026: 7.28% for a 30-year fixed loan and 6.60% for a 15-year one. Lenders charge less for the shorter loan because their money is out for fewer years, and this week the gap was 0.68 of a point.

The last row of the table separates the two effects. A 15-year loan at the 30-year rate would cost $206,784 in interest. So of the $283,283 saved, about $261,000 comes from paying the loan off sooner, and about $22,000 from the lower rate.

The full monthly payment

Lenders usually collect property tax and home insurance with the loan payment, and those do not change with the term. At the US average property tax of 0.89% of the home’s value and the average insurance premium of $1,737 a year, they add $441.42 a month to both loans. The full payment is $2,630.90 on the 30-year loan and $3,246.58 on the 15-year loan. Put your own numbers into the mortgage calculator to see your full payment for either term.

The difference between the two is still $615.69. What changes is the share: the 15-year loan raises the full payment by about 23%, not 28%.

How fast you own the house

On a long loan, early payments are mostly interest. In the first month of the 30-year loan, $1,941.33 of the $2,189.48 goes to interest and only $248.15 reduces what you owe. On the 15-year loan the first payment puts $1,045.17 toward the balance, more than four times as much.

After five years the 30-year borrower still owes $302,105 of the original $320,000. The 15-year borrower owes $245,943, which means they own $56,162 more of their home. After ten years the gap is $133,355. That matters if you sell: the equity is what you take to the next house.

The middle path: a 30-year loan paid like a 15-year one

Some people take the 30-year loan and pay $615.69 a month extra, so the total matches the 15-year payment. The extra money goes straight to the balance. Done every month, it pays off the loan in 16 years and 3 months and cuts the interest from $468,213 to $226,273.

That is a large saving, but it is $41,343 more interest than the 15-year loan itself, because the 30-year loan carries the higher rate. What the extra money buys is flexibility: in a bad month you can drop back to the $2,189.48 payment without missing anything. It only works if you keep paying the extra, and if the loan has no prepayment penalty. The amortization calculator shows the payoff date and the interest for any extra amount.

When the 30-year loan is the better choice

• The 15-year payment would strain your budget. A payment you can keep up in a bad year is worth more than the interest saving.
• You have more expensive debt. Money that would go into the higher payment does more good paying off a credit card or a car loan at a higher rate.
• You have no emergency savings yet. Extra money in a mortgage is hard to get back out without selling or borrowing again.
• You want the option. The middle path above gives you most of the 15-year saving while keeping the lower required payment.

The 15-year loan makes most sense when the higher payment fits comfortably, you have savings set aside, and you plan to stay in the home long enough for the interest saving to add up.

In the UK

UK mortgage rates are usually fixed for a set period, such as two or five years, rather than for the whole term; after that period the rate is no longer fixed. In August 2026 the Bank of England’s quoted rates series put the average two-year fix at 4.92% and the five-year fix at 4.78%, both for a loan of 75% of the home’s value.

The arithmetic of the term is the same in pounds: a shorter term means a higher monthly payment and much less interest. What does not carry over is the rate gap. Because the rate is fixed only for a few years at a time, a shorter term does not by itself get you a lower rate, the way a US 15-year loan does.

The short answer

On $320,000 at today’s averages, the 15-year mortgage costs $615.69 a month more and saves $283,283 of interest, most of it from paying the loan off sooner. If the higher payment fits with room to spare, it is the cheaper loan by a wide margin. If it does not, a 30-year loan with whatever extra you can pay gets you part of the way there and keeps a lower payment to fall back on.