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Same house, same monthly outlay — which strategy ends richer at year 30?
The 15-vs-30 debate is usually argued with vibes: "interest saved" versus "flexibility." This calculator runs the complete comparison — both homes owned free and clear at year 30, both strategies spending the same monthly amount, with the difference invested at your assumed return. The answer depends on one number: whether your investment return beats the 15-year rate.
Buyers who can afford either term use it to settle the debate with the same monthly outlay on both sides — interest saved versus investing the difference. It makes the decision hinge on one honest question: can you beat the 15-year rate after tax?
On a $320,000 loan at typical spreads (6.5% vs 5.9%), roughly $245,000 — about 60% less total interest. But the raw savings number is not the decision: the question is whether the higher payment beats what you would earn investing the difference, which is exactly what the wealth table computes.
Only if your investment return reliably beats the 15-year mortgage rate — paying down a 5.9% loan is a guaranteed, tax-free 5.9% return. At a 5% expected investment return the 15-year wins; at 8% the 30-year-plus-investing wins on paper. The behavioral catch: the strategy fails completely if the difference gets spent instead of invested.
Lenders price shorter terms lower because their money is at risk for half the time — the spread typically runs 0.5–0.75 percentage points. That spread is a second, often ignored, source of savings on top of the shorter amortization.
That preserves flexibility (drop back to the lower required payment in a bad month) but you pay the higher 30-year rate for the privilege — roughly 0.6% more on the full balance. On $320,000 that insurance policy costs about $120 a month in extra interest. Some buyers happily pay it; run your exact spread here.