Fill in two scenarios and see the monthly payment, total interest, and payoff curve side-by-side.
The 15-year vs. 30-year decision is worth more than you think
On a $400,000 mortgage, choosing 15 years over 30 at comparable rates typically saves $150,000-$200,000 in total interest — but costs $800-$1,000 more per month. That gap is real money, and the right answer depends on your other options. If your 401(k) match is uncaptured, or you carry 7% credit card debt, the 30-year payment structure may let you put that monthly delta to better use elsewhere.
Rate differences between scenarios compound harder than most people expect. A 0.5% rate gap on a $350,000 loan adds up to roughly $35,000 over 30 years. Comparing two lender offers side by side — same loan amount, different rates and terms — is the clearest way to see what you are actually buying. This calculator shows you the monthly payment, total cost, and interest paid for both scenarios simultaneously so nothing is hidden.
Frequently asked questions
Why does the 15-year mortgage have a lower interest rate than the 30-year?
Lenders take on less risk with a shorter loan — your balance shrinks faster, so their exposure window is smaller. The rate discount is typically <strong>0.5% to 0.75% lower</strong> on a 15-year. On a $400,000 loan, that rate gap alone saves tens of thousands beyond what the shorter term already saves. It is one of the few genuinely free benefits in mortgage pricing.
Should I pay points to buy down my rate?
One point costs 1% of the loan amount and typically buys 0.25% off your rate. The break-even is usually <strong>4-7 years</strong>. If you plan to sell or refinance before then, points are a losing trade. If you are buying a forever home and rates are higher than historical norms, buying down makes more sense. Run both scenarios in this calculator with and without the point cost added to the loan amount.
What is a good debt-to-income ratio when comparing mortgage options?
Most lenders want your total monthly debt payments — including the new mortgage — below <strong>43% of gross income</strong>. Conventional loans prefer under 36%. If Scenario A puts you at 41% DTI and Scenario B at 38%, that gap matters for approval odds, not just monthly comfort. Use this calculator to confirm which option keeps your payment in a range lenders will approve.
Does it ever make sense to take the higher-rate mortgage?
Yes — if it comes with better terms elsewhere. No prepayment penalty, lower closing costs, or lender credits that offset the rate can make a nominally worse rate the better total deal. Also, if you plan to pay extra principal aggressively, the 30-year with higher rate gives you flexibility: you can pay like a 15-year but drop back to minimum payments in a tough month. The 15-year does not offer that escape valve.