When comparing mortgage strategies, the choice often comes down to certainty vs. flexibility. A 15-year fixed mortgage locks you into higher payments but guarantees faster payoff and lower interest. A 30-year mortgage with bi-weekly payments plus extra prepayments lets you control the pace. Let’s see how the numbers play out with a $300,000 loan at 6% interest.

📊 Scenario 1: 15-Year Fixed Mortgage

• Loan amount: $300,000

• Term: 15 years (180 months)

• Interest rate: 6%

• Monthly payment (principal + interest): ≈ $2,531

• Total interest paid over 15 years: ≈ $156,000

• Total cost of loan (principal + interest): ≈ $456,000

📊 Scenario 2: 30-Year Fixed Mortgage with Bi-Weekly Payments + $300 Extra

• Loan amount: $300,000

• Term: 30 years (360 months)

• Interest rate: 6%

• Standard monthly payment (principal + interest): ≈ $1,799

• Bi-weekly payment plan: 26 half-payments per year.

  • Each bi-weekly payment: ≈ $900

  • Annual payments: 26 × $900 = $23,400

Adding $300 Extra Each Bi-Weekly

• New bi-weekly payment: $900 + $300 = $1,200

• Annual payments: 26 × $1,200 = $31,200

• Loan payoff: ≈ 15 years (almost identical to a 15-year mortgage!)

• Total interest paid: ≈ $160,000

• Total cost of loan: ≈ $460,000

⚖️ Side-by-Side Comparison

🧠 Which Strategy Makes Sense?

• 15-Year Mortgage: Guarantees discipline and slightly lower interest costs.

• 30-Year with $300 Extra: Offers flexibility. If life circumstances change, you can reduce or pause extra payments without penalty.

💡 Final Thought

Adding $300 to each bi-weekly payment on a 30-year loan essentially transforms it into a 15-year payoff schedule, with nearly identical interest savings. The difference is psychological and practical: one locks you in, the other gives you freedom to adjust.