How much can a 15-year mortgage save you in interest compared to a 30-year mortgage?

A 15-year mortgage can save you significantly in interest compared to a 30-year mortgage primarily due to the reduced length of time that interest accrues on the outstanding balance. With a 30-year loan, the borrower pays interest over a longer period, which can result in a substantially higher total interest payment. In contrast, a 15-year mortgage has higher monthly payments due to the shorter repayment term, but the total interest paid over the life of the loan is considerably lower.

For example, if you were to take out a $200,000 mortgage at a fixed rate, the total interest paid with a 30-year mortgage might be tens of thousands more than with a 15-year mortgage, depending on the interest rates at the time of borrowing. This substantial savings in interest can amount to hundreds of thousands of dollars over the term of the loan, making the 15-year mortgage a financially savvy choice for those who can afford the higher monthly payments and want to reduce their interest costs significantly.

This understanding reflects why option B is the most accurate and beneficial choice when considering long-term financial health and reducing overall debt.