15-Year Mortgage Calculator

Key Considerations

• On a $280,000 loan, a 15-year term at 5.9% (typical 0.5-0.75% discount vs. 30-year rates) produces a monthly payment of roughly $2,364 -- about $598 more per month than a 30-year at 6.5%.
• Total interest on the 15-year term would be approximately $145,500 compared to over $357,000 on a 30-year -- a savings of more than $211,000 over the life of the loan.
• After just 5 years on a 15-year mortgage, you will have paid down roughly $78,000 in principal versus only about $22,000 on a 30-year -- giving you substantially more equity if you need to sell or refinance.
• Before committing to a 15-year term, ensure you still have room to max out 401(k) contributions and maintain 3-6 months of living expenses in an emergency fund.
• If the higher payment feels tight, consider taking the 30-year loan but making extra payments equivalent to the 15-year amount -- this preserves flexibility while still accelerating payoff.

Quick Numbers

How This Compares

Frequently Asked Questions

When does a 15-year mortgage make financial sense?

A 15-year term works best when your housing payment stays under 28% of gross income even at the higher monthly amount, and you have stable employment with limited other debt. On a $280,000 loan, you need roughly $100,616 in annual income for the $2,348 payment versus $75,848 for the 30-year option. The $214,539 in interest savings is most valuable if you plan to stay in the home for at least seven to ten years.

How much of a rate discount do 15-year mortgages typically offer?

Lenders commonly price 15-year fixed rates 0.50% to 0.75% below comparable 30-year rates because the shorter term presents less risk. In this scenario, 5.9% on a 15-year versus 6.5% on a 30-year reflects a typical 0.60% spread. Always compare the annual percentage rate (APR) across lenders, as closing costs can offset a seemingly lower interest rate.

Can I switch from a 30-year to a 15-year mortgage later?

You can refinance from a 30-year to a 15-year loan at any time, but you will pay closing costs of 2% to 3% of the remaining balance. Refinancing makes sense when rates have dropped or your income has increased enough to absorb the higher payment. Alternatively, keeping the 30-year loan and making extra principal payments gives you similar savings with more flexibility if your finances change.

How quickly does a 15-year mortgage build equity?

After five years on a $280,000 loan at 5.9%, you will have paid down approximately $78,000 in principal compared to roughly $22,000 on a 30-year loan at 6.5%. That $56,000 equity gap gives you significantly more financial flexibility if you need to sell, refinance, or tap a home equity line. By year ten on the 15-year term, you will own more than half the home outright.