The term decision is the largest controllable number in a home purchase, and it's usually made in thirty seconds. Here is the full tradeoff on a $300,000 loan, computed exactly.
The raw numbers
At 6% over 30 years: payment $1,799, total interest $347,515. At 5.5% over 15 years (shorter terms get lower rates): payment $2,451, total interest $141,225. The 15-year costs $653 more per month and saves $206,290 over the loan's life. Both effects matter: roughly two-thirds of the saving comes from the shorter term, the rest from the rate discount. Run your own amount in the comparison tool.
What the 30-year buys
Flexibility. The lower required payment is a floor, not a ceiling — you can pay it like a 15 in good months and drop back in bad ones. Qualification headroom, since debt-to-income ratios use the required payment. Inflation leverage: a fixed payment shrinks in real terms over three decades.
What the 15-year buys
The interest savings above, locked in by structure rather than discipline. Equity speed: the principal-over-interest crossover arrives within the first two years instead of past year 15. A finish line that coincides with, say, college bills or retirement.
The hybrid most people ignore
Take the 30, pay it like a 15. You keep the safety floor and capture most of the interest savings — sacrificing only the rate discount (and requiring discipline). The extra payment calculator prices this strategy exactly. The 20-year term is the other compromise worth pricing: a large share of the 15's savings at a far gentler payment.
The honest bottom line
This is a cash-flow-versus-total-cost decision, and the right answer depends on income stability, other debts, and what the payment difference would otherwise do. The tools give you both numbers precisely; no calculator can weigh your nights of sleep.
Why the 15-year rate is lower
The discount isn't a promotion. Shorter loans expose the lender to less interest-rate risk and less default time, and they're cheaper to fund against; the market prices that as a persistent 0.5–0.75% spread. That spread compounds the structural saving — which is why the 15-year's total interest is typically around a third of the 30-year's, not the half that the term ratio alone would suggest.
Stress-test before you choose
The 15-year payment must survive your worst plausible year, not your average one. Three checks: could you still make $2,451 after a job loss with your emergency fund? Does committing it underfund retirement accounts with better tax treatment? Is your income volatile (commission, contracting) in a way that makes a high floor dangerous? A "no" on any of these is the case for the 30-paid-like-a-15 hybrid: identical behavior in good times, a $1,799 floor in bad ones. The discipline cost is real — most people's voluntary extras decay — but it's an honest trade, and the calculator shows exactly what intermittent discipline still saves.
One more candidate
Price the 20-year before deciding. At $2,924 per month on a $400,000 loan it captures a surprising share of the 15-year's savings ($208,488 less interest than the 30) at a far gentler step up.
Decide with both numbers visible
Whatever you choose, choose it looking at the total-interest gap and the payment gap on the same screen — that's the entire purpose of the comparison tool. The industry will always lead with the payment; the schedule always settles the bill. Seeing both at once is the whole game.
What about points and ARMs?
Two variations complicate the clean comparison. Paying points to buy down either rate is its own break-even problem — divide the upfront cost by the monthly saving and compare to your expected stay, exactly as with a refinance. An ARM undercuts both fixed rates initially but converts the term decision into a rate-risk decision after the fixed period; its schedule beyond the first reset is an estimate by construction. For most borrowers comparing like with like, the fixed 15/20/30 ladder remains the honest decision set — and the comparison tools price every rung of it.