15-Year or 30-Year Fixed Mortgage Calculator

Which best describes how you feel about monthly mortgage payments?

I need the smallest monthly payments possible. I have some flexibility, but I don't want to overextend myself. I'll pay what I need to get the home I want.

Which best describes your monthly budget?

Very tight. I wish I had more, but I can get by each month. I have some flexibility, but not an unlimited budget. I'm able to purchase what I want each month.

If you had a financial crisis, such as job loss, do you have savings to cover your bills?

I don't have much in savings. I have some in savings, but it may not be enough. I think I could make it through a short-term crisis with the savings I have.

Which best describes your contributions to 401(k)s, IRAs, or other retirement plans?

I don't contribute regularly. I contribute regularly, but not the maximum. I contribute the maximum.

Which statement best describes your investment style?

I'm a diligent investor looking for the best returns. I invest some, but not diligently. I'm not an investor.

Which best reflects your feeling about the total interest you will pay over the life of the mortgage?

I really want to minimize the amount of interest I pay. I'm equally concerned about total interest, monthly payments, and getting the home I want. I'm not too concerned about the total interest, as long as the other terms seem right.

Which best describes your plans?

I plan to buy the "most house" I can possibly afford. I don't expect to buy the "most house" I can possibly afford.

Your years to retirement: In your case, you are in a very good position to invest relatively aggressively now because you have a lot of time to ride-out the volatility of more-aggressive investments. (But remember: To make the most of your 30-year mortgage, you need to be diligent about investing the "extra" cash you'll have each month due to the 30-year mortgage).

Your viewpoint on monthly payments: Your answers indicates that you are concerned about the size of the your monthly mortgage payments. This points in favor of a 30-year mortgage which allows you to have lower monthly payments. Specifically, in your case, based on the numbers you entered during this session, the monthly payments for a 30-year mortgage will be ($0.00) lower than those of the comparable 15-year mortgage (see the chart above).

Your monthly budget: You indicated that your monthly budget is not very flexible. This points in favor the 30-year mortgage because the 30-year mortgage allows your mortgage payments to be smaller ($0.00 smaller in your case).

Your emergency savings: You indicated that you may not have enough money saved in an emergency fund. By taking a 30-year mortgage, you'll have more cash available each month to build an adequate emergency fund (generally, six months of living expenses), which should be a top priority of yours.

Your retirement savings: You indicated that you are not contributing the maximum to retirement savings plans. This points in favor of the 30-year mortgage because the 30-year mortgage allows lower monthly payments which can give you "extra" cash each month to put into a tax-deferred retirement savings plan, which is one of the most productive ways of building your resources for retirement. This is especially true for you because you are not yet close to retirement and you therefore can benefit from many years of compounding interest on your pre-tax retirement savings (if you get the funds in there!).

Your investment habits: You indicated that you are a diligent investor looking for the best returns on your money. This points strongly in favor of a 30-year mortgage because a 30-year mortgage allows you to make lower monthly payments that can give you "extra" cash each month to put into investments that can provide a return higher than the 15-year mortgage rate, which you indicated to be 3.2%.

Your viewpoint on total interest: You indicated that you are particularly interested in minimizing the total amount of interest you'll pay for your mortgage. This points strongly in favor of the 15-year mortgage because, as shown in the table above, a 15-year mortgage will cost you significantly less in interest over the life of the loan (in your case, $0.00 less).

The type of home you are seeking: You indicated that you don't expect to buy the "most house" you can possibly afford. This suggests that the 30-year mortgage may not be right for you because one of the main advantages of the 30-year mortgage is that it enables people to borrow the most money they can based on their monthly budget. In contrast, a 15-year mortgage is generally better for people who are willing to buy less house than they can afford and want to spend additional money each month to pay-off the mortgage more quickly.