15-Year vs. 30-Year Mortgage
The term of your mortgage dramatically affects your monthly payment, total interest paid, and wealth-building timeline. In California's high-cost market, this decision matters even more.
| Feature | 15-Year Mortgage | 30-Year Mortgage |
|---|---|---|
| Monthly Payment (on $800K) | ~$6,100/mo at 6.0% | ~$4,800/mo at 6.5% |
| Total Interest Paid | ~$298,000 | ~$920,000 |
| Interest Rate | Typically 0.5–0.75% lower | Standard market rate |
| Monthly Cash Flow | Less flexible — higher payment | More flexible — lower payment |
| Equity Building | Much faster | Slower, especially early years |
| Qualification | Harder — higher payment increases DTI | Easier — lower payment helps DTI |
| Total Cost Savings | Saves ~$620K in interest on $800K loan | Lower monthly obligation |
Best For: 15-Year Mortgage
Borrowers with high income relative to the loan amount who want to minimize total cost and build equity rapidly. Ideal for refinancing into a shorter term.
Learn More About 15-Year Mortgage →Best For: 30-Year Mortgage
Most California buyers — the lower payment provides flexibility, and extra payments can be made voluntarily to accelerate payoff without the commitment of a 15-year schedule.
Learn More About 30-Year Mortgage →The Bottom Line
In California's expensive market, the 30-year is more popular because the lower payment helps with qualification and cash flow. But if you can comfortably afford the 15-year payment, the interest savings are enormous. Save Financial shows clients both options so you can choose with full visibility.
Not Sure Which Is Right for You?
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