Better Homeowners
Selling Colorado and the Colorado Lifestyle

Long Term Savings with a Shorter Term Mortgage - 9/3/2025

When financing a home, the 30-year fixed-rate mortgage is often the go-to option because of its lower monthly payment. But for buyers who can comfortably afford a higher payment, the 15-year mortgage deserves a closer look and may lead to significantly greater financial rewards over time.

Let's compare two scenarios based on a $360,000 mortgage with current rates:

  • 30-year mortgage at 6.58%
    Principal and interest: $2,294.42/month
  • 15-year mortgage at 5.69%
    Principal and interest: $2,977.92/month

At first glance, the 15-year loan costs about $684 more per month. But when you look at where that money is going, and what it saves you, it starts to make a compelling case.

Interest Savings and Faster Equity Build-Up

The key difference lies in how much of your payment goes toward the principal balance. With the 15-year loan, you pay less interest over time and you pay it off faster.

After 10 years:

  • On the 30-year loan, you'd still owe $305,804.
  • On the 15-year loan, your balance would be just $155,189 - almost half.

That means you've paid down far more of the loan and built significantly more equity in your home, which increases your financial flexibility and net worth.  Paying an extra $684 per month for 10 years adds up to $82,080, but the 15-year mortgage reduces the loan balance by $150,615 more than the 30-year option, resulting in a net equity gain of nearly $68,535.

Other Long-Term Advantages

  • Lower total interest paid: Over the life of the loan, you'll save tens of thousands of dollars.
  • Faster path to mortgage-free living: Paying off your home in 15 years frees up your budget sooner and reduces long-term financial stress.
  • Equity growth: Greater equity gives you more options for future borrowing, renovations, or downsizing with more cash in hand.

Yes, the 15-year loan requires a higher monthly payment, but if it fits your budget, the long-term benefits are hard to ignore. You'll save substantially on interest, build equity faster, and own your home outright in half the time.

Before locking in a mortgage, run the numbers and talk to your lender. If you can manage the higher payment, the 15-year loan could be one of the best financial moves you make.  We'd be happy to run an analysis for you or go to our 15-yr vs. 30-yr comparison.

Kathleen Harken CRS, GRI, SFR, AHWD Keller Williams Realty DTC Englewood, CO (303) 909-5990 My introduction to the world of real estate came at an early age, working alongside my father in the industry. This early exposure instilled in me a deep appreciation for the intricate dynamics of the field. After brief detours into investment banking, mortgage lending, and marketing, I found my true calling in real estate in 1995. My diverse background equips me with a unique perspective that I use in crafting informed and strategic solutions for my clients. With each client I serve, my primary goal is to cultivate a tailored and educational experience. I understand that every individual approaches the real estate process with distinct aspirations and requirements. My dedication to client education stands as a cornerstone of my practice. I firmly believe that an informed client is an empowered one. I take the time to elucidate the intricate details of the buying and selling process, ensuring that my clients make decisions with confidence and clarity. This commitment to education extends to navigating the ever-evolving market landscape, equipping clients with insights that enable them to make confident choices. I've also been an active participant in the real estate community. Serving as Chairman of the Board at the local board of REALTORS in 2005-2006, a state director at the Colorado Association of REALTORS, and roles in the Colorado state CRS chapter, I continually seek ways to contribute and stay attuned to industry trends and best practices. While my professional commitment is unwavering, I also relish the Colorado outdoors and adventure that comes with it. Whether scaling Colorado's peaks or enjoying the camaraderie of a hockey game, or a bike ride/run on one of the many trails around the city, I find solace in the exhilaration of these pursuits. And, amidst all these ventures, my greatest adventure has been the 25+-year journey of marriage to my husband, Dale, and our shared commitment to fostering and raising large breed dogs. A unique fact about me is my non-skiing status ... a quirk that adds a touch of individuality to my Colorado roots. With a profound dedication to professionalism, client education, and a keen understanding of market trends, I offer a comprehensive experience that places the client at the forefront. Navigating the real estate landscape can be complex, but with my guidance and educational approach, my clients are empowered to make informed choices that align with their goals. Contact Me Visit my Website Send a Referral Subscribe to Newsletter