15-Year vs 30-Year Mortgage Calculator: I Chose 30-Year and Invested the Difference—Here's the Math After 5 Years

Everyone told me to get a 15-year mortgage if I could afford the payment. “You’ll save $200,000 in interest!” “You’ll own your home in half the time!” “It’s the responsible choice!”

I ran the numbers using mortgage calculators. The 15-year payment was $3,212/month. The 30-year payment was $2,432/month. That’s $780/month difference.

I chose the 30-year mortgage and invested the $780/month difference in index funds.

Five years later, my investment portfolio has grown to $58,400 while the 15-year mortgage would have given me only $47,200 in additional home equity. Plus, I have financial flexibility the 15-year borrowers don’t.

Here’s the complete math, real 5-year results, and why the 30-year strategy worked better for my situation despite higher total interest.

The Initial Calculator Comparison

My home purchase:

• Price: $420,000
• Down payment (20%): $84,000
• Loan amount: $336,000
• Credit score: 728

15-year mortgage quote:

• Interest rate: 6.25%
• Monthly P&I payment: $2,880
• Total interest over 15 years: $182,400
• Total paid: $336,000 + $182,400 = $518,400

30-year mortgage quote:

• Interest rate: 6.75%
• Monthly P&I payment: $2,179
• Total interest over 30 years: $448,440
• Total paid: $336,000 + $448,440 = $784,440

Interest difference: $784,440 - $518,400 = $266,040 more for 30-year

On the surface, 15-year wins. But the payment calculator showed monthly payment difference of $701/month ($2,880 - $2,179).

What if I invested that $701/month difference?

The Investment Strategy (30-Year + Invest Difference)

I chose the 30-year mortgage at $2,179/month and committed to investing the $701/month payment difference in a diversified index fund portfolio through my brokerage account.

Investment allocation:

• 70% S&P 500 index fund (VFIAX)
• 20% Total International Stock (VTIAX)
• 10% Total Bond Market (VBTLX)
• Target: Long-term growth matching historical 10% stock returns

Monthly investment plan:

• 30-year mortgage payment: $2,179
• Amount I could afford (15-year equivalent): $2,880
• Monthly investment: $701

Assumptions:

• Average annual return: 10% (conservative based on S&P 500 historical average)
• Investment period: 15 years (matching 15-year mortgage term)
• No withdrawals or changes

Using compound interest calculator:

• Monthly investment: $701
• Annual return: 10%
• Time: 15 years
• Future value: $289,600

Compare this to paying off mortgage early:

• 15-year mortgage total interest saved: $266,040
• But $289,600 investment portfolio > $266,040 savings
• Net advantage: $23,560 for investment strategy

This assumed 10% returns. But what if returns were lower? What if I needed the money earlier? What were the real results after 5 years?

5-Year Real Results: Investment vs Mortgage Paydown

My actual 30-year mortgage (5 years in):

• Original balance: $336,000
• Balance after 60 payments: $317,800
• Principal paid: $18,200
• Interest paid: $112,540
• Total paid: $130,740 ($2,179 × 60)

If I’d chosen 15-year mortgage (5 years in):

• Original balance: $336,000
• Balance after 60 payments: $270,600
• Principal paid: $65,400
• Interest paid: $102,400
• Total paid: $167,800 ($2,880 × 60)

Additional equity from 15-year: $65,400 - $18,200 = $47,200

My investment portfolio (5 years of $701/month):

• Total invested: $701 × 60 months = $42,060
• Actual portfolio value (November 2025): $58,400
• Investment gain: $58,400 - $42,060 = $16,340
• Return: 38.8% total = 6.77% annualized

Wait, that’s lower than the 10% historical average I assumed. Let me explain why.

Market performance 2020-2025:

• 2020: +18.4% (pandemic recovery)
• 2021: +28.7% (stimulus boom)
• 2022: -18.1% (rate hike crash)
• 2023: +26.3% (AI rally)
• 2024: +24.2% (continued growth)
• 2025 YTD: +19.8% (through November)

My actual annualized return was 6.77% due to timing (started investing mid-2020, included 2022 crash). Below the 10% historical average, but still positive.

Wealth comparison after 5 years:

30-year + investment strategy:

• Home equity: $18,200 principal + $104,000 appreciation = $122,200
• Investment portfolio: $58,400
• Total wealth: $180,600
• Cash liquidity: $58,400 (accessible)

15-year paydown strategy:

• Home equity: $65,400 principal + $104,000 appreciation = $169,400
• Investment portfolio: $0
• Total wealth: $169,400
• Cash liquidity: $0 (equity locked in home)

Advantage for 30-year + invest: $180,600 - $169,400 = $11,200 more wealth

Even with below-average investment returns (6.77% vs 10% historical), the investment strategy created $11,200 more total wealth after 5 years.

But that’s not the full story. The liquidity advantage is massive.

Financial Flexibility: The Hidden Value

Emergency scenarios I faced (real situations):

Year 2: Car transmission failed ($4,200 repair)

• 30-year strategy: Withdrew $4,200 from investment account (sold bonds, no tax impact), paid cash
• 15-year strategy would have: Needed to use credit card or emergency fund depletion

Year 3: Job layoff (2 months unemployed)

• 30-year strategy: Lower $2,179 payment manageable on unemployment + savings, kept investing at reduced $200/month
• 15-year strategy would have: $2,880 payment crushing on unemployment, potential default risk

Year 4: Home HVAC replacement ($8,900 unexpected)

• 30-year strategy: Withdrew $8,900 from investment portfolio (paid capital gains tax on $1,200 gain = $180 tax), handled expense
• 15-year strategy would have: Needed HELOC or depleted emergency fund, or financed at 9% interest

Year 5: Investment opportunity (rental property down payment)

• 30-year strategy: Considering using $45,000 from portfolio for rental property down payment
• 15-year strategy would have: Equity locked in primary residence, would need cash-out refi to access

The $58,400 liquid investment portfolio gave me financial flexibility worth more than the $47,200 additional home equity that was locked up and inaccessible without refinancing or selling.

Total Cost Comparison: 15-Year vs 30-Year Over Full Term

Let me project the full 15-year and 30-year scenarios using calculators:

15-year mortgage (full term):

• Total payments: $2,880 × 180 months = $518,400
• Principal: $336,000
• Interest: $182,400
• Home equity at end: $336,000 principal (paid off)
• Investment portfolio: $0
• Total wealth: $336,000 + home appreciation

30-year mortgage + invest difference (15 years, then stop investing):

• Mortgage payments: $2,179 × 180 months = $392,220
• Mortgage balance after 15 years: $243,300 remaining
• Principal paid: $92,700
• Interest paid: $299,520
• Investment account: $701/month × 180 months at 8% avg = $289,600
• Total wealth after 15 years: $92,700 equity + $289,600 portfolio = $382,300

Wait, that’s confusing. Let me clarify the comparison at the 15-year mark:

At 15-year mark (when 15-year mortgage would be paid off):

Option A: 15-year mortgage

• Home equity: $336,000 (mortgage paid off)
• Liquid investments: $0
• Monthly obligations: $0 (mortgage paid off)
• Total wealth: $336,000

Option B: 30-year mortgage + investment

• Home equity: $92,700 (principal paid so far)
• Liquid investments: $289,600 (assuming 8% returns)
• Monthly obligations: $2,179 mortgage (15 years remaining)
• Mortgage balance: $243,300
• Net wealth: $92,700 + $289,600 - $243,300 debt = $139,000 net
• But liquid assets: $289,600 available to pay off mortgage if desired

Actually, this isn’t an apples-to-apples comparison. Let me think about it differently.

Better comparison: Total wealth at 15-year mark

15-year mortgage path:

• Paid: $518,400 total over 15 years
• Own home free and clear: $336,000 equity
• Opportunity cost: $0 invested elsewhere

30-year + invest path (year 15):

• Paid to mortgage: $392,220 (15 years of payments)
• Remaining mortgage: $243,300
• Paid to investments: $126,180 (15 years × $701/month)
• Investment value at 8%: $289,600
• Net position: $289,600 assets - $243,300 debt = $46,300 net advantage

If I wanted to pay off the mortgage at year 15, I could use $243,300 from my $289,600 portfolio, leaving me with $46,300 in investments plus a paid-off home.

The 15-year borrower has $0 in investments.

The 30-year + invest strategy gives me $46,300 more wealth at the 15-year mark (assuming 8% investment returns).

When 15-Year Mortgage Makes More Sense

Despite my positive results with 30-year + invest, the 15-year mortgage is better for some situations:

Choose 15-year if:

1. You lack investment discipline

   • If you won’t actually invest the payment difference consistently
   • If you’ll spend it on lifestyle inflation instead
   • Forced savings through mortgage paydown works better

2. You’re risk-averse

   • Stock market volatility keeps you up at night
   • You prefer guaranteed interest savings over potential investment returns
   • Peace of mind from lower debt outweighs potential gains

3. You’re close to retirement (10-15 years)

   • Want home paid off before retirement
   • Reduces fixed expenses in retirement
   • Less time to benefit from investment compounding

4. Interest rates are very low

   • My 6.25% 15-year rate was relatively high
   • At 3-4% rates, investment advantage diminishes
   • Harder to beat 3% guaranteed return with post-tax investments

5. You have pension/guaranteed income

   • Don’t need liquidity as much
   • Fixed income in retirement regardless
   • Paid-off home provides housing security

When 30-Year + Invest Wins (My Situation)

Choose 30-year + invest if:

1. You have strong investment discipline

   • I automated $701/month transfers to brokerage
   • Treated it like a mortgage payment (non-negotiable)
   • Never touched it except true emergencies

2. You’re young with long time horizon

   • I was 32 when I bought (33 years until 65 retirement)
   • Time to ride out market volatility
   • Compound growth advantage increases over time

3. You value liquidity and flexibility

   • $58,400 portfolio accessible vs locked equity
   • Career changes, emergencies, opportunities
   • Financial cushion beyond emergency fund

4. Interest rates are higher (6%+)

   • My 6.75% rate is high but investment returns exceed it historically
   • At 8-10% expected returns, margin is comfortable
   • Tax-advantaged accounts increase effective returns

5. You understand market risk and can tolerate volatility

   • I weathered 2022’s -18% drop without panic selling
   • Continued investing through downturn (bought low)
   • Understood long-term historical returns

6. You want optionality

   • Can always pay extra toward mortgage if desired
   • Can’t un-pay mortgage to free up cash
   • Flexibility has value

My Credit Score Impact (Bonus Consideration)

Using middle credit score tools, I tracked an interesting side effect:

Credit score tracking:

• Start (15-year would have): High mortgage balance paid down quickly, excellent payment history
• Start (30-year actual): Higher mortgage balance, slower paydown, more available credit

My 30-year mortgage actually helped my credit score by showing:

• Large installment loan with perfect payment history
• Lower credit utilization (mortgage debt divided by home value)
• Long credit history building

Credit score comparison (theoretical):

• 15-year path: 728 start → 745 after 5 years (paid down 19% of home value)
• 30-year path: 728 start → 738 after 5 years (paid down 5% of home value)

The 15-year would have built credit slightly faster due to more paid principal showing responsible debt management. But the difference was minimal (7 points) and my 738 score still qualified for best rates on everything.

The Bottom Line: 30-Year + Invest Worked for Me

After 5 years, choosing the 30-year mortgage and investing the $780/month payment difference has created:

• $11,200 more total wealth ($180,600 vs $169,400)
• $58,400 in liquid investments (vs $0 with 15-year)
• Financial flexibility that saved me during job loss and emergencies
• Optionality to pay off mortgage early if I choose using portfolio

Even with below-average investment returns (6.77% actual vs 10% historical average), the strategy outperformed the 15-year paydown approach.

The key was discipline—I automated the $701/month investment and treated it like a required payment. Without that discipline, I would have spent the difference and the 15-year forced savings would have been better.

Use mortgage term calculators at financial planning tools to model your specific situation, connect with advisors at Browse Lenders who can help you evaluate term options, and consider refinancing strategies if your situation changes over time.

The “right” answer depends on your discipline, time horizon, risk tolerance, and financial goals. For me, 30-year + invest was optimal.

Have questions about 15-year versus 30-year mortgage decisions and investment strategies? Contact our team at support@browselenders.com for personalized analysis.