15-Year vs 30-Year Mortgage: Which Term Actually Fits Your Life?

Headlines move daily, but the decision that matters most isn’t the exact rate—it’s which loan term fits your cash flow and risk. Choosing well can save tens of thousands over the life of a loan, even if rates only wiggle by a quarter point.

The Snapshot

Rates change constantly, but your loan term locks in how your payments feel day-to-day.
The right choice balances monthly comfort, total interest, and future flexibility.

15-Year vs 30-Year at a Glance

15-Year

Typically a lower rate than the 30-year
Much higher monthly payment
Equity builds fast; total interest paid is far lower
Best when income is stable and you’ll stay put for a while

30-Year

Slightly higher rate
Lower monthly payment (more breathing room)
Easier to qualify at a given price point
Best when you value flexibility or have variable income

A 60-Second Payment Gut-Check

Use this quick rule before you get attached to a house:

For each $10,000 borrowed at a typical fixed rate:

30-year ≈ $65–70/month
15-year ≈ $85–95/month

If the 15-year pushes your PITI (payment, interest, taxes, insurance) above ~30–35% of gross monthly income, the 30-year will likely feel safer—then you can self-amortize by adding extra principal when months are good.

How to Decide (3 Questions)

Cash flow: What payment is comfortable in a “normal” month—not your best one?
Time horizon: Are you likely to move, change jobs, or need extra cash in the next 3–5 years?
Volatility: Is your income steady (salary) or spiky (sales, contract, gig)?

If cash flow or volatility is your top concern → 30-year.
If total interest and speed to equity are your top concern → 15-year.

Lower the Real Cost—Whichever Term You Choose

Points vs credits: Buy points only if break-even (points cost ÷ monthly savings) is < ~5 years. If cash is tight, lender credits can reduce upfront costs—but usually raise the rate slightly.

Prepay a 30-year like a 20- or 25-year: Add a fixed extra principal amount each month (even $100–$300 helps). If life happens, pause without penalty.

Avoid PMI if close to 20% down: Compare waiting a few months to save more vs buying now with PMI; model both totals.

Keep closing costs honest: Get at least three same-day quotes with the same points so APR comparisons are apples-to-apples.

Should You Refinance Later?

A refi makes sense when (rate drop × remaining balance) meaningfully exceeds (closing costs + reset-of-term effects).
Track a target drop (often ~0.75–1.00%) and calculate a break-even:

Break-even months = closing costs ÷ new monthly savings

Plan to keep the home beyond that break-even and consider how far you are into the current amortization schedule.

Timing Tips for Rate Watchers

Lock when lenders offer a dip; even 0.125–0.25% moves change payments.
Have documents ready so you can act quickly (pay stubs, W-2/1099, bank statements).
If rates feel whippy, ask about float-down options in case the market improves before closing.

Bottom Line

Choose the 30-year for flexibility and sleep-at-night cash flow; prepay when you can.
Choose the 15-year to crush interest and build equity fast—if the payment fits comfortably.

Either way, clarity beats headlines: compare multiple quotes, know your break-even, and match the loan to your real life—not just today’s rate.