What is better a 15 or 30 year mortgage?

A 15-year mortgage isn't universally better than a 30-year. It depends on your financial situation and your goals. The advantages of a 15-year are a lower interest rate, typically 0.5 to 0.75 percent lower than a 30-year, and dramatically less total interest paid over the life of the loan. On a $300K loan, the difference in total interest between a 15-year and a 30-year can be $100K or more. You also build equity faster and own your home free and clear in half the time. The tradeoff is a significantly higher monthly payment. A $300K loan at 6 percent for 30 years is about $1,800 per month. The same loan at 5.5 percent for 15 years is about $2,450 per month. That's $650 more per month that could go toward investments, retirement savings, an emergency fund, or other financial priorities. If the higher payment is comfortable and doesn't stretch your budget, the 15-year saves you a massive amount of money in interest. If the higher payment would leave you cash-strapped with no financial cushion, the 30-year gives you flexibility and breathing room. You can always make extra payments on a 30-year mortgage to pay it off faster while keeping the lower required payment as a safety net if your income changes. The worst move is to take a 15-year mortgage, stretch to make the higher payment, and then have no savings when something breaks or your income dips.

There’s no one-size-fits-all answer—it really depends on your financial situation and long-term goals. A 15-year mortgage will save you a significant amount in interest and help you build equity faster, but the monthly payments are much higher. A 30-year mortgage offers lower monthly payments, which can give you more financial flexibility or allow you to qualify for a higher purchase price, but you'll pay more in interest over time. If you’re focused on paying off your home quickly and can comfortably afford the higher payments, the 15-year option can be a great choice. If you prefer a lower monthly payment or want more room in your budget for savings, investments, or unexpected expenses, the 30-year may be the better route. It’s all about what fits best with your lifestyle and financial goals.

A 15 year mortgage allows you to pay significantly less money over the life of the loan. The Interest rate is lower than the 30 year mortgage, your payment will be higher but more of your money will be going towards the principal, allowing you to get the loan paid off in half the time.