The 15 vs 30 year mortgage calculator is for new home buyers and homeowners who are considering refinancing their home.

• Home Buyers. Use the calculator to decide which type of mortgage to buy. Getting the above information will likely require more research for you as you are starting from scratch.
• Homeowners. You will want to use the Capital Bank 15 vs 30 mortgage calculator to decide whether to refinance, how to refinance, or whether to purchase another property.

A fixed mortgage means that your interest rate remains the same regardless of the market. If you get a 3% loan then you will pay 3% for the life of the loan, even if the market rate drops to 2%. That would be unfortunate, but the upside is that you are protected if rates increase above 3%. While others pay a higher rate because they chose a variable interest rate or are new to the market, you will pay only 3%. So a 15 year fixed mortgage means you will pay the same interest rate throughout the life of the 15 year loan.

A 30 fixed mortgage means that your interest rate remains the same regardless of the market over the life of your 30 year loan. The interest remains the same regardless if the market goes higher or lower. You get protection from an upturn in interest rates, but miss out on savings if the market drops to lower interest rates.

A 15-year mortgage is designed to be paid off over 15 years. The interest rate is often lower on a 15-year mortgage, because you make larger payments over less time. The term is half as long as a 30 year mortgage, so you’ll pay a lot less interest over the life of the loan.

A 30 year mortgage is twice as long as a 15 year mortgage. You will likely have lower monthly payments, but a higher interest rate than a 15 year mortgage. That means that you will pay more over the life of the 30 year loan than the 15 year loan, but it will be much easier to make the payments.

• Cons – Buying a 15 year mortgage means you will be less liquid (have less cash on hand), and not be able to save or invest as much as you could with lower monthly payments.
• Pros – You will usually save a significant amount on the loan, remove debt much faster, and have more equity in the house each year to use for other investments or homes.

• Cons – More payments, longer term debt, less equity in the home each year, more exposure to risk (30 years is a long time.)
• Pros – Payments are much lower each month, you have more money available to you each month for expenses and/or investments.

When looking at the difference between a 15 year and 30 year mortgage to decide which term is right for you ask these questions:

• Do I want lower payments each month and more cash each month?
  • Consider the 30 year mortgage
• Do I want more equity in less time, be debt free sooner, and can I afford the 15 year payments easily?
  • Consider the 15 year mortgage.

The 30 year mortgage is for those who are looking to use the extra available cash each month for other expenses or investments and find the 15 year mortgage difficult to pay each month.

With a 15-year, $250,000 mortgage with 4% APR, your monthly payments will be approximately $1,849.22. This estimate only includes the principal and interest amounts. Actual payment obligation will be higher.

For a $400,000 mortgage over 30 years, your monthly payments will be approximately $1,686 based on an APR of 3%. This estimate only includes the principal and interest amounts. Actual payment obligation will be higher.

For a $400,000 mortgage over 20 years, your monthly payments will be approximately $2,530 based on an APR of 4.5%. This estimate only includes the principal and interest amounts. Actual payment obligation will be higher.

20 year mortgages are gaining in popularity in recent years. Please reference our Home Loans Calculator where you can adjust “terms in year” to specify your loan timeframe. Here, you can compare 15 year vs. 20 year mortgages for a better idea of what you can expect from each type of mortgage.