A 15-year mortgage versus a 30-year mortgage

The shorter term raises the loan payment and cuts the interest. Housing costs around the loan stay the same.

Same loan, different payment

Change only the term. The amount borrowed stays price minus down payment. A 15-year term uses 180 payments. A 30-year term uses 360. The level payment is higher on the short term because the same balance must reach zero sooner.

Interest over the life of the loan is lower on the short term. You can see that in the yearly table’s cumulative interest, not only in the monthly line.

The rest of the month does not shrink

Tax, insurance, PMI, and HOA do not get smaller because you picked 15 years. PMI can end sooner, because the balance falls faster and hits 80% of the original price on an earlier month.

The household month uses the payment for the term you picked. A 15-year loan can crowd take-home even when it saves interest.

Compare terms as offers only if the rates differ

The two-offer box compares two rates on the term already selected. It does not compare a 15-year rate against a 30-year rate in one click. To see both terms, change the term and read the payment and the table.

If a lender’s 15-year quote also has a different APR, note the fee estimate at that term before you decide the shorter loan is automatically cheaper.

This explains how WiseCalculator treats the numbers you type. It is not a lender’s offer and it is not advice for your loan.