15-year vs 30-year Terms

Which is better: 15 or 30 year loan term?

		Shorter Term		Longer Term
	Interest Rate		%
	Loan amount	$		$
	Term (years)
	Discount points	$		$
	Origination fee	$		$
	Upfront costs	$		$
	Your savings rate				%
	Your state + federal tax rate				%
	Purchase price			$
	Yearly property tax			$
	Yearly property insurance			$
	Years before you sell or pay off loan

		Shorter Term	Longer Term
	Principal and interest	$857.42	$632.07
	Taxes and insurance	$475.00	$475.00
	Mortgage insurance	$0.00	$0.00
	Total payment	$1,332.42	$1,107.07

This calculator calculates monthly payments for two fixed-rate mortgage loans and helps you determine which loan is the better deal. Monthly savings that you realize from different payment amounts are invested at a savings interest rate that you designate.

Loan terms do not have to be 15 or 30 years. Since these periods are the two most common periods for mortgage loans, they are used as defaults.

A shorter loan term generates less mortgage interest, reducing your mortgage interest deduction. It also requires you to make larger monthly payments. However, a shorter loan term allows you to pay off the loan sooner and invest elsewhere.