Bills, meet your match
Schedule, track and manage payments anytime, anywhere.
When preparing to buy a home or refinance your mortgage, the most common question we hear at Ameris Bank is, “Which is better, a 15- or 30-year mortgage?” The answer is very individualized, as there are pros and cons to both. Here’s what you need to know when considering a 15-year mortgage or a 30-year mortgage.
Fifteen and 30-year home loans are typically fixed-rate mortgages, which means the interest rates stay the same over the course of the loan. The major differences between 15-year and 30-year mortgages come down to interest rates and payments:
For most people, the biggest advantage of a 15-year mortgage is the lower interest rate, which can help save a lot of money in the long run. Another benefit of a 15-year home loan is that you’ll build equity in your home much faster. In comparison, selecting a 30-year mortgage is attractive because the monthly payments can be much lower, sometimes up to 50%. For example, you might pay $2,000 a month for a 15-year mortgage and $1,400 for a comparable 30-year home loan.
When debating the pros and cons of each mortgage term, the first thing to determine is how much you can afford to pay per month while maintaining your emergency fund and saving for retirement. Our home affordability calculator can help you determine if your monthly payment will fit comfortably within your budget.
If you can afford the higher monthly payments that come with a 15-year mortgage loan, you’ll enjoy long-term savings on interest. Before deciding if a 15-year mortgage is right for you, consider your job security. You might qualify for a 15-year mortgage now, but if you lose your job later and struggle to make payments, you may not have enough income to refinance into a 30-year loan with lower monthly payments.
If you are in the 50-something age range, weigh the pros and cons of paying off a mortgage over 15 years vs. taking out a 30-year loan that you still will have to cover during retirement. Having a 15-year home loan could mean knocking out your monthly mortgage payment right around the time you retire, minimizing your overhead in retirement. Choosing a 30-year loan, however, could allow you to put more money into your 401(k) or IRA while you're still working—plus, you may qualify for a mortgage-interest tax deduction.
Another factor to consider when comparing 15- vs. 30-year mortgages is how long you plan to live in your new home. If you plan to stay in your home for a short period of time—say eight years or less—a 30-year loan might make the most sense. You’ll benefit from lower monthly payments, and you won’t have to pay as much interest because you’ll be selling your home long before your loan’s pay-off date.
However, if you plan to live in your home for 15 years or more, a 15-year mortgage loan might make more financial sense if you can afford the monthly payments. With a 15-year loan, you may be able to save tens of thousands of dollars in interest.
If you’re still on the fence after weighing all these factors, there is a potential third option: locking into a 30-year mortgage and adding extra money to your monthly payments whenever you can afford to. Before considering this as an option, confirm that your lender will allow you to put these extra payments toward your principal with no prepayment penalties.
With this option, you’ll have to pay the higher interest rate of a 30-year loan, but by paying a bit more whenever possible, you can dramatically shorten your mortgage term without committing to a 15-year loan's higher monthly payments. Crunch the numbers to see how much you can save by increasing your monthly mortgage payment.
Ameris Bank is here to help. Our dedicated team of mortgage bankers can walk you through the homebuying process and help you find the best mortgage for you. Remember that current mortgage rates, taxes and fees all factor into this important decision, and the right choice will depend on your personal circumstances.
Sources:
Reviewed April 2025
All loans subject to credit approval.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Ameris Bank is not affiliated with nor endorses any of the companies featured in this article.
Affordability of 15- vs. 30-Year Home Loans
Fifteen and 30-year home loans are typically fixed-rate mortgages, which means the interest rates stay the same over the course of the loan. The major differences between 15-year and 30-year mortgages come down to interest rates and payments: - A 15-year mortgage generally provides lower interest rates but a higher monthly mortgage payment.
- A 30-year mortgage generally comes with higher interest rates but a lower mortgage payment.
For most people, the biggest advantage of a 15-year mortgage is the lower interest rate, which can help save a lot of money in the long run. Another benefit of a 15-year home loan is that you’ll build equity in your home much faster. In comparison, selecting a 30-year mortgage is attractive because the monthly payments can be much lower, sometimes up to 50%. For example, you might pay $2,000 a month for a 15-year mortgage and $1,400 for a comparable 30-year home loan.
When debating the pros and cons of each mortgage term, the first thing to determine is how much you can afford to pay per month while maintaining your emergency fund and saving for retirement. Our home affordability calculator can help you determine if your monthly payment will fit comfortably within your budget.
Consider Your Age and Job Situation
If you can afford the higher monthly payments that come with a 15-year mortgage loan, you’ll enjoy long-term savings on interest. Before deciding if a 15-year mortgage is right for you, consider your job security. You might qualify for a 15-year mortgage now, but if you lose your job later and struggle to make payments, you may not have enough income to refinance into a 30-year loan with lower monthly payments.If you are in the 50-something age range, weigh the pros and cons of paying off a mortgage over 15 years vs. taking out a 30-year loan that you still will have to cover during retirement. Having a 15-year home loan could mean knocking out your monthly mortgage payment right around the time you retire, minimizing your overhead in retirement. Choosing a 30-year loan, however, could allow you to put more money into your 401(k) or IRA while you're still working—plus, you may qualify for a mortgage-interest tax deduction.
Consider How Long You Plan to Live in Your Home
Another factor to consider when comparing 15- vs. 30-year mortgages is how long you plan to live in your new home. If you plan to stay in your home for a short period of time—say eight years or less—a 30-year loan might make the most sense. You’ll benefit from lower monthly payments, and you won’t have to pay as much interest because you’ll be selling your home long before your loan’s pay-off date. However, if you plan to live in your home for 15 years or more, a 15-year mortgage loan might make more financial sense if you can afford the monthly payments. With a 15-year loan, you may be able to save tens of thousands of dollars in interest.
Choosing a 30-Year Mortgage and Paying Extra
If you’re still on the fence after weighing all these factors, there is a potential third option: locking into a 30-year mortgage and adding extra money to your monthly payments whenever you can afford to. Before considering this as an option, confirm that your lender will allow you to put these extra payments toward your principal with no prepayment penalties.With this option, you’ll have to pay the higher interest rate of a 30-year loan, but by paying a bit more whenever possible, you can dramatically shorten your mortgage term without committing to a 15-year loan's higher monthly payments. Crunch the numbers to see how much you can save by increasing your monthly mortgage payment.
Ameris Bank is here to help. Our dedicated team of mortgage bankers can walk you through the homebuying process and help you find the best mortgage for you. Remember that current mortgage rates, taxes and fees all factor into this important decision, and the right choice will depend on your personal circumstances.
Sources:
Reviewed April 2025
All loans subject to credit approval.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Ameris Bank is not affiliated with nor endorses any of the companies featured in this article.