Which is better: 15- or 30-year loan term?
This tool calculates total cost and monthly payments for two fixed-rate mortgage loans of different terms and helps you determine which loan is the better deal. Monthly savings that you realize from different payment amounts are invested at a savings interest rate that you designate.
Loan terms do not have to be 15 or 30 years. Since these periods are the two most common periods for mortgage loans, they are used as defaults.
A shorter loan term generates less mortgage interest, reducing your mortgage interest deduction. It also requires you to make larger monthly payments. However, a shorter loan term allows you to pay off the loan sooner and invest elsewhere.