15-Year vs 30-Year Mortgage

$400,000 loan. 15-year at 6.0%. 30-year at 6.75% (15-year rates are typically 0.5–0.75% lower).

The 15-year saves over $326,000 in interest. But the monthly cost is $781 higher — a substantial commitment if your income drops, you have a kid, or you want to invest aggressively.

You can take the 30-year and pay it like a 15-year. Add roughly $781/month to principal on the 30-year and you'll pay it off in around 16 years.

The trade-off:

• Pro: If you lose your job, you can drop back to the contractually required $2,594 payment without missing anything.
• Con: You're paying the higher 30-year rate (6.75% vs 6.0%) on the entire balance for the entire time. You'll pay roughly $40K–$60K more interest than the true 15-year.

For most people who value optionality, the 30-year-paid-aggressively is the safer pick. For people with very stable incomes who'll definitely stay disciplined, the true 15-year is mathematically better.

Biweekly mortgage programs split your payment in half and bill you every two weeks. Because there are 26 biweekly periods (= 13 monthly payments) per year, you make one extra payment annually — knocking 4–6 years off a 30-year mortgage.

You can do this yourself for free: just send 1/12th extra principal each month, or one full extra payment in December. Lender-administered biweekly programs sometimes charge enrollment fees ($300–$500) or per-payment fees — skip those and DIY it.