A $900,000 loan is a typical San Diego mortgage. On a $1.1M home with 18% down, on a $1.0M home with PMI baked in — this is the loan size most buyers are actually signing for in 2026. The standard advice is to take the 30-year for the lower monthly and invest the difference. The standard advice is also a generation old, and the math has shifted. Here's what 15-year versus 30-year actually looks like at today's San Diego rates.
The rates today
As of late April 2026, Freddie Mac's Primary Mortgage Market Survey shows the 30-year fixed at 6.23% and the 15-year fixed at 5.58%.1 That's a 65-basis-point spread — fairly normal historically, though the gap has been wider in past cycles. The full math, on a $900,000 loan:
| Line item | 30-year fixed | 15-year fixed |
|---|---|---|
| Interest rate | 6.23% | 5.58% |
| Monthly P&I | $5,530 | $7,392 |
| Total payments over loan | $1,990,711 | $1,330,562 |
| Total interest paid | $1,090,711 | $430,562 |
| Loan balance after 5 years | $839,835 | $678,645 |
| Loan balance after 10 years | $757,746 | $386,246 |
The headline numbers are stark: the 15-year buyer pays $1,862 more per month but saves $660,149 in interest over the life of the loan — about 61% less interest, total. The 15-year holder also has $161,000 more equity at the 5-year mark and $371,000 more at the 10-year mark.
At today's rate spread, the headline is bigger than the article title suggests. The "$200,000 question" was framed when 15/30 spreads were tighter and rates were lower. At 6.23% versus 5.58%, this is closer to a $660,000 question.
The "invest the difference" argument
The case for the 30-year rests on the idea that the $1,862 monthly difference, invested at market returns, will outpace the interest savings of the 15-year. The Consumer Financial Protection Bureau frames the trade-off as fundamentally about "lower monthly cost versus lower lifetime cost"3 — but doesn't tell you which way the math actually breaks at any given rate spread. Let's run that math honestly.
If a 30-year buyer invests $1,862 per month for 15 years at a 7% annual return — roughly the long-term real return on the S&P 500 after inflation — the future value is approximately $590,000.2 That's less than the $660,000 in interest the 15-year buyer saves outright. The "invest the difference" argument breaks down at current rates, mostly because the 15-year rate is meaningfully lower than the 30-year rate.
The argument starts to favor the 30-year again if you assume:
- Higher market returns (8–10% nominal)
- The investor actually invests the difference every month, without fail, for 15 straight years
- The investments are held in a tax-advantaged account so capital gains don't drag returns
- The 15-year rate offered to the borrower isn't materially better than the 30-year rate
Each of those assumptions is reasonable. None of them is automatic. The "invest the difference" argument works best for disciplined investors with high marginal tax rates and access to 401(k)/IRA space. For everyone else, it's a math problem with a mediocre track record in practice.
Studies of household savings consistently show that people don't, in fact, invest the difference. The mortgage payment is automatic; the brokerage transfer is voluntary. A 15-year mortgage is forced savings — the equity accrues whether you'd planned to save that month or not. For households that struggle with consistent investing, the 15-year is often a better outcome even when the spreadsheet favors the 30-year.
When the 30-year still wins
Three situations where the 30-year is the clearly better choice:
- Cash flow is tight. If the 15-year payment pushes your housing DTI past 35% or your back-end DTI past 45%, the cushion of a lower required payment is worth the higher lifetime interest. A house you can comfortably afford is better than one you barely can.
- You're maxing tax-advantaged accounts. If you're putting $23,000+ per year into a 401(k), $7,000 into an IRA, and your spouse is doing the same, the 30-year frees up more cash for tax-deferred compounding. The math here genuinely can favor the 30-year.
- You expect to move in under 10 years. The 15-year's interest savings are back-loaded. You don't capture them if you sell or refinance early. A 30-year that gets paid off via sale at year 7 was effectively a 7-year loan — and you took it at a lower-than-15-year rate? No — at a higher rate, but with a much lower monthly. Worth running the specific numbers on your specific timeline.
When the 15-year wins
Three situations where the 15-year is the clearly better choice:
- You can comfortably afford either payment. If $7,392 per month doesn't change your retirement contributions, your emergency fund, or your standard of living, the 15-year captures the rate discount and the forced savings without trade-off.
- You're 50+ and want to retire mortgage-free. A 15-year taken at 55 is paid off at 70. A 30-year taken at the same age is paid off at 85. For households planning retirement spending, eliminating a $5,500 monthly payment in retirement is worth a lot.
- You don't reliably invest extra cash. The forced-savings argument is real. If your household track record on regular brokerage contributions is mixed, the 15-year's automatic equity accrual is the more reliable path.
The hybrid: 30-year, paid like a 15-year
One option that gets less attention than it deserves: take the 30-year, then make additional principal payments equal to what a 15-year would have required. On a $900K loan, paying an extra $1,862 per month against principal pays the loan off in roughly 16 years — close to 15-year speed, with two valuable differences:
- Flexibility. If you lose a job or hit a major expense, you can drop back to the 30-year minimum payment. The 15-year contractually obligates you to the higher payment regardless.
- Cost. You'll pay slightly more total interest than a true 15-year because the 30-year rate is higher. On a $900K loan, the gap is roughly $40,000–$60,000 over the loan life — meaningful, but smaller than the $660K headline gap.
The hybrid trades a modest amount of total interest savings for genuine optionality. For households with variable income, that trade is often worth it.
Compare 15-year and 30-year scenarios on your specific San Diego loan.
Open the calculator →The honest answer for a $900K San Diego loan
If the $1,862/month difference doesn't materially change your life, take the 15-year. The interest savings at today's rates exceed what most households will realistically earn investing the difference, and the forced-savings discipline is a feature, not a bug. If the higher payment is uncomfortable, take the 30-year and consider the hybrid approach — making extra principal payments when cash flow allows, without contractually committing to them.
The worst outcome is the buyer who takes the 30-year, plans to invest the difference, and then doesn't. That's the path that turns a $660,000 interest gap into permanent.
Calculations use current Freddie Mac PMMS rates and assume a $900,000 loan with no PMI, no escrow, and no rate buy-down. Your specific quote will depend on credit profile, lender, and loan structure. Educational content only — not legal, tax, or financial advice.
References
- Freddie Mac. (2026, April 23). Primary Mortgage Market Survey: U.S. weekly mortgage rate averages. https://www.freddiemac.com/pmms
- Damodaran, A. (2025). Historical returns on stocks, bonds and bills: 1928–2024. New York University Stern School of Business. Retrieved April 28, 2026, from https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html
- Consumer Financial Protection Bureau. (n.d.). What's the difference between a 15-year and 30-year fixed-rate mortgage? Retrieved April 28, 2026, from https://www.consumerfinance.gov/ask-cfpb/whats-the-difference-between-a-15-year-and-a-30-year-mortgage-en-106/