Doesn’t the 15-year save a huge amount of interest?

Yes, and that figure is real but incomplete. It compares two plans with different monthly outlays without asking what the larger one could have earned. The 15-year payment here is several hundred dollars a month more; over fifteen years, invested, that is a large sum the interest-saved figure never mentions.

What return do I need for the 30-year to win?

The calculator gives the exact figure for your rates. It is usually in the region of the 30-year rate itself, adjusted for the rate gap and for tax on the investment. A wider gap between the 15- and 30-year rates raises the bar; a narrower gap lowers it.

What if I would not actually invest the difference?

Then take the 15-year. The whole case for the longer loan rests on the difference being invested every month for thirty years, and the model assumes that happens without fail. A 15-year mortgage enforces the saving contractually, which for many people is worth more than the arithmetic it costs.

Can I take a 30-year and just pay it like a 15-year?

Yes, and it is a genuine middle path, you keep the flexibility of the smaller required payment while overpaying voluntarily. The cost is the rate: you pay the 30-year rate on the whole balance. Whether to overpay at all is what mortgage payoff versus investing answers, and the mortgage calculator has an extra-payment field to see the effect.

Which is safer if my income drops?

The 30-year, and this comparison cannot show it. Its required payment is smaller, so a lean month is easier to survive, and money invested on the side can be reached, home equity generally cannot without borrowing against it. The 15-year’s higher payment is an obligation regardless of what happens to your income.

Is a 15-Year Mortgage Better Than a 30-Year?

Is a 15-year mortgage better than a 30-year? Only if the market cannot beat the rate gap between them. The usual comparison, that the 15-year saves a fortune in interest, never asks what its much larger payment could have earned instead, so this one spends the same money on both paths.

Example numbers

The verdictfrom an example

Investing the difference has to beat 7.66% a year for the 30-year to win. At 7.0% it does not.

Worked on $400,000 at 5.80% over 15 years against 6.50% over 30. Change anything below to use yours.

Your expected return7.00%

7.66%The bar to beat

← The 15-year winsThe 30-year plus investing wins →

Return you have to beat: 7.66%
The 15-year costs more each month: $804.09

The figures behind it

Return you have to beat: 7.66%; The return at which both paths end with the same net worth.
The 15-year costs more each month: $804.09; $3,332.36 against $2,528.27. That difference is what the 30-year path invests.
Interest the 15-year saves: $310,355; The headline figure in every comparison, and the one that ignores what the extra payment could have earned.
15-year: net worth at 30 years: $1,056,233; Mortgage free at year 15, then the whole payment invested for fifteen years.
30-year plus investing: $980,964; The smaller payment, with the difference invested from month one.
At 7.0%, the 30-year ends: -$75,269; Behind. The 15-year is the stronger move.

Net worth on both paths

Years from today

15-year mortgage30-year, investing the difference

Payment scheduleShow

The table scrolls sideways

Year	15yr · mortgage	15yr · net worth	30yr · mortgage	30yr · invested	30yr · net worth
1	$382,758	-$382,758	$395,529	$9,965	-$385,564
2	$364,489	-$364,489	$390,759	$20,650	-$370,109
3	$345,132	-$345,132	$385,669	$32,107	-$353,562
4	$324,622	-$324,622	$380,238	$44,393	-$335,845
5	$302,890	-$302,890	$374,444	$57,567	-$316,877
6	$279,864	-$279,864	$368,262	$71,693	-$296,568
7	$255,465	-$255,465	$361,665	$86,841	-$274,824
8	$229,614	-$229,614	$354,627	$103,083	-$251,544
9	$202,223	-$202,223	$347,117	$120,500	-$226,617
10	$173,200	-$173,200	$339,105	$139,176	-$199,929
11	$142,448	-$142,448	$330,556	$159,202	-$171,354
12	$109,865	-$109,865	$321,434	$180,675	-$140,759
13	$75,341	-$75,341	$311,702	$203,701	-$108,001
14	$38,760	-$38,760	$301,317	$228,391	-$72,926
15	$0	$0	$290,237	$254,866	-$35,371
16	$0	$41,297	$278,415	$283,255	$4,840
17	$0	$85,579	$265,802	$313,697	$47,895
18	$0	$133,062	$252,343	$346,338	$93,995
19	$0	$183,977	$237,984	$381,340	$143,356
20	$0	$238,573	$222,662	$418,872	$196,210
21	$0	$297,117	$206,315	$459,117	$252,802
22	$0	$359,892	$188,872	$502,271	$313,399
23	$0	$427,205	$170,262	$548,545	$378,283
24	$0	$499,384	$150,405	$598,165	$447,759
25	$0	$576,781	$129,218	$651,371	$522,152
26	$0	$659,773	$106,613	$708,423	$601,810
27	$0	$748,765	$82,493	$769,600	$687,106
28	$0	$844,190	$56,758	$835,199	$778,441
29	$0	$946,513	$29,300	$905,540	$876,240
30	$0	$1,056,233	$0	$980,964	$980,964

What this result assumes

Both paths spend $3,332.36 every month for thirty years. The 15-year sends it all to the lender for fifteen years and then invests all of it; the 30-year sends part to the lender and invests the rest from month one.
That equality is the whole point. The usual "the 15-year saves $200,000 of interest" comparison is not a comparison at all, because it never asks what the larger payment could have earned instead.
The 15-year is also a commitment rather than a choice: the higher payment is contractual, while investing the difference relies on you actually doing it every month. Most people do not, and this model assumes perfect discipline.
Escrowed tax and insurance are excluded, identical on both paths, and the mortgage interest deduction is ignored, which slightly favours the 15-year for filers who itemize.

Methodology

Reviewed September 1, 2026

Why the usual comparison is not one

Every version of this question is answered with the same figure: a 15-year mortgage saves an enormous amount of interest. On the default numbers here it saves well over $150,000, and that is entirely true.

It is also not a comparison, because the two plans do not spend the same money. The 15-year payment is far larger, and that extra outlay every month for fifteen years has to come from somewhere. A calculation that counts the interest saved but never asks what the extra payment could have earned has quietly assumed the answer.

So both paths here spend the 15-year payment every month for thirty years. The short mortgage sends all of it to the lender for fifteen years and then invests the whole payment for the remaining fifteen. The long mortgage sends its smaller instalment to the lender and invests the difference from month one. Same cash, same horizon, and the only open question is what return tips it.

The rate gap is what you are really deciding about

A 15-year loan is quoted a lower rate than a 30-year — typically half a point to a point less — and that gap is the entire mathematical case for it. Paying the mortgage down is a guaranteed return equal to its rate, so the short loan wins whenever the market cannot beat what the rate difference is worth.

The breakeven is found by bisection between 0% and 20%, halved until the interval is under a basis point. It is the return at which the two terminal net-worth figures are equal, and the test suite checks that running the model at that rate really does produce a tie.

Under a flat marginal rate, a tax-deferred or Roth account gives the same breakeven — the tax scales both sides equally and cancels out. Only a taxable account moves the bar, because its annual drag reduces what the invested difference actually earns. The tests assert that cancellation directly.

What the model assumes about you

Perfect discipline. The 30-year path only works if the difference is genuinely invested every month for thirty years, without interruption and without being spent. The 15-year path requires nothing of the sort, because the higher payment is contractual — the bank enforces the saving whether or not you feel like it that month.

That asymmetry is real and this model cannot price it. If you would not reliably invest the difference, the arithmetic favouring the 30-year simply does not apply to you, and the honest answer is the one the calculator cannot give.

The reverse risk is worth stating too. The 15-year payment is a fixed obligation: if your income falls, you still owe it. The 30-year with a side investment is more flexible precisely because the commitment is smaller and the invested money can be reached. Neither of those appears in a net-worth figure.

Assumptions

Both paths spend the 15-year payment every month for the full thirty years.
Both are measured on the same date, thirty years out, with both mortgages fully repaid.
The rate on each loan is fixed, and both are taken today at the rates entered.
Returns arrive smoothly at the rate entered. Volatility and sequence risk are not modelled.
The difference is invested every month without fail, which is the model’s largest assumption.
Taxable gains are taxed annually at your marginal rate, harsher than real capital-gains treatment.
Tax-deferred balances are taxed in full at withdrawal; the up-front deduction is not modelled.
Escrowed property tax and insurance are excluded — identical on both paths.
The mortgage interest deduction is ignored, which slightly favours the 15-year for filers who itemize.
No prepayment, refinance or move is modelled during the thirty years.

Sources

Common questions

Is a 15-year mortgage better than a 30-year?: It depends on whether your expected return beats the gap between the two rates. The 15-year is a guaranteed return equal to its rate and saves a great deal of interest; the 30-year frees up a large monthly sum that can be invested. Enter both rates above and the calculator solves for the return at which they tie, below it the 15-year wins, above it the 30-year does.
Doesn’t the 15-year save a huge amount of interest?: Yes, and that figure is real but incomplete. It compares two plans with different monthly outlays without asking what the larger one could have earned. The 15-year payment here is several hundred dollars a month more; over fifteen years, invested, that is a large sum the interest-saved figure never mentions.
What return do I need for the 30-year to win?: The calculator gives the exact figure for your rates. It is usually in the region of the 30-year rate itself, adjusted for the rate gap and for tax on the investment. A wider gap between the 15- and 30-year rates raises the bar; a narrower gap lowers it.
What if I would not actually invest the difference?: Then take the 15-year. The whole case for the longer loan rests on the difference being invested every month for thirty years, and the model assumes that happens without fail. A 15-year mortgage enforces the saving contractually, which for many people is worth more than the arithmetic it costs.
Can I take a 30-year and just pay it like a 15-year?: Yes, and it is a genuine middle path, you keep the flexibility of the smaller required payment while overpaying voluntarily. The cost is the rate: you pay the 30-year rate on the whole balance. Whether to overpay at all is what mortgage payoff versus investing answers, and the mortgage calculator has an extra-payment field to see the effect.
Which is safer if my income drops?: The 30-year, and this comparison cannot show it. Its required payment is smaller, so a lean month is easier to survive, and money invested on the side can be reached, home equity generally cannot without borrowing against it. The 15-year’s higher payment is an obligation regardless of what happens to your income.

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