How much interest does the 15-year actually save?

On a $320,000 loan, switching from 30 years at 6.5% to 15 years at 5.5% can save more than $150,000 in lifetime interest. Run your own numbers in the calculator — the difference depends on rates and principal.

Can I refinance from a 30-year into a 15-year later?

Yes. Many borrowers buy with a 30-year, then refinance to a shorter term once their income rises or rates fall. You'll pay closing costs, so it has to be worth it.

15-year vs. 30-year mortgage

The 15-year vs. 30-year choice is really a choice between cash-flow flexibility and total interest cost. Both can be the right answer; it depends on your situation.

What you trade

15-year: lower rate (often 0.5–1.0% lower), much higher monthly payment, dramatically less lifetime interest, faster equity buildup, done in half the time.
30-year: higher rate, much lower required payment, more lifetime interest, more flexibility if your income drops or you need cash for emergencies. You can always pay it like a 15-year voluntarily.

The hybrid: 30-year paid like a 15-year

Take the 30-year loan, then pay extra principal each month equal to the difference between the 15-year and 30-year payments. You capture most of the interest savings and you keep the option to drop back to the lower required payment if your situation changes — losing a job, a medical bill, a baby. The 15-year doesn't give you that escape hatch.

When the 15-year really wins

You have stable, high income with a wide gap between earnings and expenses.
You've already maxed out tax-advantaged retirement accounts.
You're close to retirement and want the loan gone before then.
The rate gap between 15- and 30-year is wide and you'd invest the savings conservatively rather than aggressively.

When the 30-year really wins

Your income is variable or early in your career.
You don't have a fully-funded emergency fund yet.
You expect to invest the payment difference and earn more than the rate spread.
You might move within 5–10 years — the term length matters less than the rate you pay during your stay.

Frequently asked

How much interest does the 15-year actually save?: On a $320,000 loan, switching from 30 years at 6.5% to 15 years at 5.5% can save more than $150,000 in lifetime interest. Run your own numbers in the calculator — the difference depends on rates and principal.
Can I refinance from a 30-year into a 15-year later?: Yes. Many borrowers buy with a 30-year, then refinance to a shorter term once their income rises or rates fall. You'll pay closing costs, so it has to be worth it.

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