Interest Savings Calculator
Compare total interest costs between 15-year and 30-year loan terms.
Interest Savings (15 vs 30 yr)
$247,608
30-Year Payment
$2,212
15-Year Payment
$3,049
30-Year Interest
$446,406
15-Year Interest
$198,798
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What it does: Compares the total interest cost of a 15-year vs 30-year mortgage on the same loan amount and rate.
When to use: Use this when you are deciding between a 15-year and 30-year mortgage and want to see the interest savings and payment difference.
How to use: Enter your loan amount and interest rate. The calculator compares the monthly payment and total interest for both 15-year and 30-year terms.
Key Inputs Explained
Worked Example
On a $350,000 loan at 6.5%: 30-year payment = $2,212, total interest = $446,000. 15-year payment = $3,054, total interest = $199,720. Savings = $246,000 in interest, but $842/month higher payment.
Assumptions & limitations: This calculator uses the same rate for both terms. In reality, 15-year rates are typically 0.25-0.5% lower, which increases the savings. It also does not account for the opportunity cost of the higher 15-year payment.
Calculator FAQs
Why are 15-year rates lower?
Shorter-term loans are less risky for lenders — the borrower pays off faster, reducing the chance of default. Lenders pass this reduced risk on as a lower rate.
Can I get the savings without the higher payment?
Yes. Take a 30-year loan and make extra payments equivalent to a 15-year. You get most of the interest savings with the flexibility to drop to the 30-year payment if needed.
What about the opportunity cost?
The $842/month difference invested at 7% for 30 years grows to about $1,000,000. Compare this with the $246,000 in interest savings before deciding.
Are there tax implications?
Less interest means a smaller mortgage interest deduction (if you itemize). This reduces the net savings slightly. Consult a tax professional for your situation.