While the specifics can certainly vary and while there are many new and innovative products in the home loan world today, the two most popular home loan types are both fixed rate mortgages. One is the 30-year mortgage, which is sort of the standard home loan that’s usually offered to new buyers. The other is the 15-year home loan. Each has its advantages when compared to the other.

30-year fixed mortgages are, by far, the more popular between the two. 30-year home loans have a lower monthly payment than a 15 year home loan. Among other things, this means you can get a bigger loan (and therefore a house that’s more expensive) with a 30-year mortgage than you can with a 15-year mortgage. In addition, a 15-year mortgage can be harder to qualify for, and isn’t an option for every borrower.

The benefit that a 15-year home loan has over a 30-year home loan is that you’ll pay less in interest charges over the course of the loan, even though you’ll pay more per month.

Let’s look at some real-world numbers. Let’s assume that you’re going to buy a home at a price of 200,000. We’ll say you get a decent interest rate of 6 percent, just for the sake of the example. On a 15-year loan, you’re going to pay $1681.96 a month. On a 30-year home loan, you’re going to pay $1,197.91 per month. You’re looking at a difference, then, of just under $500 per month in your mortgage payment.

Now, let’s look at that same loan over the course of the loan. On the 15-year loan, you’re going to pay a total of $302,753, of which $102,753 is interest. On the 30-year mortgage, you’ll pay a total of $431,249, of which $231,249 is interest. As you can see, you’re looking at a significant difference in the amount of interest you pay over the course of the loan.

Now, the question remains which is better. If you’re able to get the amount of home you want for a 15-year mortgage, you will pay less in interest. However, there’s always the possibility that you could instead invest the extra money you save each month and make a profit on it. If you can make a decent return on your investment, it may well be worth taking the longer term home loan.