House on a calculator with a card and an infographic on the mortgage costs

Choosing between a 15 vs 30 year mortgage can shape your financial future when buying a home in Arizona. Your loan term affects the interest rate, monthly payments, and how quickly you build equity.

Arizona homebuyers often face this decision with long-term goals in mind. You must understand the trade-offs between a 15 year mortgage versus 30 year mortgage to make a confident choice.

What Is a 15 Year Mortgage?

A 15 year mortgage is a home loan paid off in 15 years with fixed monthly payments. It usually comes with a lower interest rate than a 30 year mortgage, so you pay less in interest over time.

Why is the 15 year mortgage attractive to homeowners?
  • You build home equity faster.
  • The total interest paid is lower.
  • You pay the loan off in half the time.
  • It’s ideal for those with stable income and fewer budget constraints.
The downsides?
  • Monthly payments are higher.
  • You face tight budget constraints.
  • Less flexibility and breathing room.

What Is a 30-Year Mortgage?

A 30-year mortgage is the most common home loan. It spreads payments over a longer period, lowering the monthly amount. It's more manageable for many buyers and gives them more purchasing power, especially in areas with rising home prices.

Why would someone choose a 30-year mortgage?
  • Lower monthly payments make budgeting easier.
  • Leaves room for other expenses or savings goals.
  • Easier to qualify for due to the reduced payment amount.
What are the disadvantages of a 30-year mortgage?
  • You pay more in interest over time.
  • It takes longer to build equity.
  • The interest rate may be slightly higher compared to a 15-year loan.

Comparing Costs: 15 Year vs 30 Year Mortgage

The biggest difference between a 15 year vs 30 year mortgage is how much interest you’ll pay over time. Look at this simple example:

Let’s say you take out a $300,000 loan:

  • 15-year mortgage at 5% interest
    • Approximately $2,372/month
    • Around $127,000 total interest
  • 30-year mortgage at 6% interest
    • Approximately $1,799/month
    • Around $347,000 total interest

That’s a difference of over $200,000 in interest over the life of the loan.

Pros and Cons: 15 Year Mortgage versus 30 Year Mortgage

Here’s a quick breakdown to help compare a 15 year or 30 year mortgage side by side:

15-Year Mortgage

pros.

Less interest paid over the life of the loan

Builds equity faster

Often lower interest rates

cons.

Higher monthly payments

Tighter monthly budget

Less saving capacity for retirement or emergencies

Rosk of financial hardship

30-Year Mortgage

pros.

Lower monthly payments

More financial flexibility

Easier to qualify for

cons.

More interest paid over time

Slower equity buildup

Higher long-term cost

Why Some Homeowners Choose a 15 Year Mortgage over a 30 Year Mortgage

Many homeowners pick a 15 year mortgage because they want to own their home outright sooner and save money in the long run. Here’s why:

They’re in a strong financial position and can handle higher monthly payments

They want to pay off their mortgage before retirement

They value home equity growth and long-term savings over short-term flexibility

Is It Better to Buy a House With a 15 or 30 Year Mortgage?

The better choice depends on your financial situation and goals. There’s no one right answer. Some buyers even start with a 30 year loan and make extra payments to reduce interest without committing to a shorter term.

A 15-year mortgage is better if you can afford higher payments and want to save on interest. A 30-year mortgage works if you need lower payments and value flexibility.

Many financial advisors recommend maxing out contributions to tax advantage investments like IRA’s and 401k programs before committing to a 15 year loan.

Factors Specific to Arizona Homebuyers

When choosing between a 15 vs 30 year mortgage, Arizona buyers should also consider local market conditions:

Home prices in many parts of Arizona have risen, making affordability a key concern

Property taxes are relatively low, which may make higher payments on a 15-year loan more manageable.

Utility costs and homeowners insurance vary by region, impacting budget planning

Some buyers expect strong home value appreciation, making quicker equity growth a smart play.

Making the Right Mortgage Choice for Your Situation

The best option depends on your goals, income, and payment preferences.

Whether you choose a shorter payoff timeline or more breathing room each month, make the decision that fits your life today and tomorrow.

Refinance your home today!