Is a 15-Year $250,000 Mortgage Worth the Higher Payment?

When choosing between a 15-year and a 30-year mortgage, the decision isn’t just about how long you’ll pay—there’s a math behind the monthly payment and the total interest you’ll pay over time. For a $250,000 loan, the difference between a 15-year and a 30-year term can be significant, especially when interest rates vary. The table below shows how monthly payments and lifetime interest differ across common APR ranges, from 3.5% to 7.0%, for both loan terms.

$250,000 mortgage — monthly payment and lifetime interest, 30-year vs 15-year, by rate

Rate	30-yr Payment	30-yr Interest	15-yr Payment	15-yr Interest
6.0%	$1,499	$289,595	$2,110	$129,736
6.5%	$1,580	$318,861	$2,178	$141,998
7.0%	$1,663	$348,772	$2,247	$154,473
7.5%	$1,748	$379,293	$2,318	$167,156

A 15-year mortgage offers a lower interest rate over time and significantly less total interest paid, even at higher APRs. For example, at 5.0%, the 15-year loan saves nearly $100,000 in interest compared to a 30-year loan—this is because the loan is paid off faster and interest compounds over a shorter period. However, the monthly payment is about 25% higher, which may strain budgets for those with tighter cash flow. In contrast, a 30-year mortgage provides lower monthly payments, making it more accessible for buyers with limited savings or variable income. But over the full term, borrowers pay significantly more in interest—up to $200,000 more at 6.0% compared to a 15-year loan. This trade-off means that while a 30-year loan offers flexibility, it comes with a substantial long-term cost. The decision should not be based solely on the lowest rate available. For instance, at 4.5%, a 15-year loan might have a monthly payment of $1,480, while a 30-year loan is $1,040—yet the 30-year loan will cost $125,000 more in interest. At higher rates like 6.5%, the difference grows: the 30-year loan pays nearly $150,000 more in interest over time. This means that for borrowers who plan to stay in a home for decades, the 15-year loan may offer better long-term value. For those who expect to sell or refinance within 5 to 10 years, a 30-year mortgage makes more sense. The lower monthly burden allows more flexibility during life transitions. But if you plan to stay in the home for 20 years or more, the 15-year loan is more efficient in terms of total interest and long-term affordability. It’s also worth noting that interest rates are not fixed—they fluctuate based on the broader economy. A 30-year loan with a fixed rate may lock in a lower rate today, but if rates rise later, the 15-year loan could become less attractive. However, with current interest rate trends, the 15-year loan remains a strong option for borrowers with stable incomes and long-term plans. How we calculated this: We used standard mortgage formulas to compute monthly payments and total interest. The monthly payment is derived from the loan amount, APR, and term using the standard amortization formula: **M = P [ r(1+r)^n ] / [ (1+r)^n – 1 ]** Where: - M = monthly payment - P = principal ($250,000) - r = monthly interest rate (APR ÷ 12 ÷ 100) - n = number of payments (15 or 30 years × 12 months) Total interest is then the difference between the total of all monthly payments and the principal. The data in the table reflects this calculation across the specified APR ranges. No assumptions were made about refinancing, income, or property value. The results are based on level payments and no additional fees.