Side by side, no spin
| 15-year @ 5.9% | 30-year @ 6.5% | |
|---|---|---|
| Monthly payment (P&I) | $2,515 | $1,896 |
| Total interest | $152,770 | $382,633 |
| Total paid | $452,770 | $682,633 |
| Balance after 5 years | $227,598 | $280,833 |
| Equity from payments, 5 yrs | $72,402 | $19,167 |
Two structural reasons the 15-year wins on cost: less time borrowing, and a rate discount — lenders price 15-year money about half a point cheaper because it's less risky to them. That discount is real and only available by committing to the higher payment.
The third option: a 30 paid like a 15
Take the 30-year, then voluntarily pay the 15-year amount ($2,515). On our numbers that pays off in about 16 years 1 months with $183,575 of interest — $30,805 more than the true 15-year. That gap is precisely the price of flexibility: you're paying the 30-year rate for an escape hatch you can use if income drops. Cheap insurance for some households, wasted money for others with rock-solid income.
Who should lean which way
- Lean 15-year: stable income, emergency fund intact, retirement match captured, and the higher payment still leaves savings room. The forced discipline plus the rate discount is the most efficient equity builder available to most households.
- Lean 30-year: variable income, young kids/child-care years, other high-return uses for cash (employer match, expensive debt), or you're buying near your affordability ceiling. Add extras when you can — the extra-payment calculator shows each scenario.
- Already own? Refinancing a 30 into a 15 mid-life is common once income grows — run the break-even in the refinance calculator.
The mistake to avoid
Don't take the 15-year payment if it crowds out your emergency fund — house-rich, cash-poor is fragile, and missed payments cost more than the interest savings. The affordability calculator (set the term to 15) shows whether the shorter term fits your ratios before you fall in love with the savings number.