At the Freddie Mac averages for the week ending September 3, 2026 — 6.71% on a 30-year and 6.04% on a 15-year — a $400,000 loan costs $2,584 a month over 30 years or $3,384 over 15. The 15-year payment is $800 higher and saves $321,022 in interest. The question is whether you can carry the $800 every month for fifteen years.
The trade, in one worked example
Two things change when you shorten the term, and only one of them is obvious. The payment goes up because you are repaying the same principal in half the time. But the rate also comes down, because a lender's exposure is shorter and the risk premium is smaller.
The Freddie Mac Primary Mortgage Market Survey for the week ending September 3, 2026 put the 30-year fixed average at 6.71% and the 15-year at 6.04% — a spread of 0.67 percentage points.
| 30-year | 15-year | |
|---|---|---|
| Rate | 6.71% | 6.04% |
| Monthly principal and interest | $2,584 | $3,384 |
| Total interest paid | $530,156 | $209,134 |
| Difference | — | +$800/month, −$321,022 interest |
Computed with the standard amortisation formula at the PMMS averages for the week ending September 3, 2026.
The headline number is arresting: over the life of the loan, the 30-year borrower pays more in interest than the entire amount borrowed. The 15-year borrower pays about half the principal in interest. That gap is the single strongest argument for the shorter term.
The honest case against the 15-year
The interest saving is real, but stating it alone is how this comparison is usually mis-sold. Three things weigh the other way, and none of them shows up in the total-interest column.
- ·The payment is a commitment, not a target. The $800 difference is contractual. If your income drops, the 30-year borrower can keep paying $2,584; the 15-year borrower still owes $3,384. A 30-year mortgage with voluntary extra payments gives you most of the saving and none of the obligation.
- ·The money has alternative uses. $800 a month directed at a mortgage is $800 not going into a retirement account, an emergency fund, or paying down higher-rate debt. Whether that trade is favourable depends on returns nobody can promise you — which is exactly why it is a judgement rather than a calculation.
- ·Home equity is illiquid. Money paid into a mortgage is difficult to get back out. Reaching it means selling, refinancing, or borrowing against the house — and the last two depend on qualifying at the time you need the money, which is often precisely when you cannot.
None of this makes the 15-year wrong. It makes it a decision about certainty and flexibility rather than a decision about arithmetic, and the arithmetic alone will always favour it.
The option this comparison hides
There is a third choice that neither column represents: take the 30-year and pay it like a 15-year when you can.
You give up the 0.67-point rate advantage, so you will not match the 15-year exactly. What you gain is that every dollar above $2,584 is voluntary. In a good year you pay it; in a bad year you do not, and nothing happens. The lender cannot object to being repaid faster, and on a conventional mortgage there is normally no prepayment penalty.
That flexibility has a cost and it is worth quantifying rather than hand-waving: on this loan the 15-year borrower's rate advantage is 0.67 points on a declining balance. If you intend to make the higher payment reliably for fifteen years, the 15-year term is straightforwardly better. If there is any doubt, the 30-year with extra payments is the cheaper form of insurance. Our early mortgage payoff calculator prices that middle path directly.
The spread is not a constant, and it matters
The $321,022 figure above depends on a 0.67-point gap between the two terms. That gap moves, and when it narrows the case for the shorter term weakens considerably.
A year earlier the same survey put the 30-year at 6.50% and the 15-year at 5.60% — a spread of 0.90 points. Today it is 0.67. The week before this one it was 6.66% and 5.98%, or 0.68. The series is published weekly by Freddie Mac and mirrored by theFederal Reserve Bank of St. Louis, which is the easiest place to see how both terms have moved over time.
Two practical consequences. First, a comparison you ran six months ago is stale, because both the level and the spread have moved. Second, the spread is one of the few things worth shopping for explicitly: lenders do not all price the 15-year the same way relative to their 30-year, and a lender who is competitive on one is not automatically competitive on the other. Ask for both quotes from each lender rather than assuming the gap is a market constant.
It is also worth remembering what the PMMS is. It is a weekly national average of what lenders are offering to well-qualified borrowers with substantial down payments — not an offer, and not a rate you are entitled to. Treat it as the benchmark against which to judge a quote, not as the quote itself.
What this comparison leaves out
Both columns above are principal and interest only. Several real costs are identical across the two terms and therefore cancel — but two do not.
- ·Mortgage insurance. With less than 20% down, PMI applies to both, but the 15-year loan amortises past the threshold where it can be removed far sooner.
- ·The interest deduction. If you itemise, IRS Publication 936 allows the deduction on the first $750,000 of acquisition debt ($375,000 married filing separately), with a $1,000,000 limit grandfathered for debt incurred before December 16, 2017. The 30-year loan generates more deductible interest — but paying a dollar of interest to deduct a fraction of it is not a saving, and most borrowers now take the standard deduction anyway.
- ·Mortgage insurance premiums are no longer deductible at all. Publication 936 states plainly that the itemised deduction for mortgage insurance premiums has expired. Any comparison still crediting PMI with a tax benefit is out of date.
- ·Property taxes and homeowners insurance. Escrowed on both, identical on both, and frequently larger than the difference this page is about.
A note on qualifying
One practical constraint sits underneath this whole comparison: the 15-year loan is harder to qualify for.
Lenders assess the payment you are contracting to make, not the one you intend to make. On this loan that is $3,384 rather than $2,584, and the difference flows straight into your debt-to-income ratio. A borrower who qualifies comfortably for the 30-year may not qualify for the 15-year at all, or may qualify only for a smaller loan and therefore a cheaper house.
That is worth knowing before you fall in love with the interest saving, and it points back to the middle path: a 30-year loan qualifies on the lower payment and can still be paid down at the higher one. You can check the ratio effect with our debt-to-income calculator before you choose a term.
Methodology
Payments are computed with the standard amortisation formula M = P·[r(1+r)ⁿ]/[(1+r)ⁿ−1] on a $400,000 principal, using the Freddie Mac PMMS averages for the week ending September 3, 2026 — 6.71% over 360 months and 6.04% over 180. Total interest is the sum of payments less principal. Rates are a weekly national average and are not a quote; your rate depends on credit, down payment, loan size and lender. Deduction limits are quoted from IRS Publication 936.
Sources
- Freddie Mac — Primary Mortgage Market Survey (week ending September 3, 2026) — accessed 2026-09-05
- Federal Reserve Bank of St. Louis (FRED) — 30-Year Fixed Rate Mortgage Average (MORTGAGE30US) — accessed 2026-09-05
- IRS — Publication 936, Home Mortgage Interest Deduction — accessed 2026-09-05