Should I Choose a 15-Year or 30-Year Mortgage in San Diego?

The Two Most Common Mortgage Terms

The vast majority of San Diego home buyers choose between two loan terms: the 30-year fixed mortgage, which provides the lowest monthly payment, and the 15-year fixed mortgage, which pays off the loan in half the time at a lower interest rate but significantly higher monthly payment.

The 30-Year Mortgage

The 30-year fixed mortgage is the most popular choice in San Diego because it offers the most affordable monthly payment — critical in a market where even moderately priced homes require large loan amounts. The trade-off is that you pay significantly more total interest over the life of the loan and build equity more slowly in the early years.

The 15-Year Mortgage

A 15-year mortgage comes with a lower interest rate — typically 0.5 to 0.75 percent below the 30-year rate — and builds equity twice as fast. However, the monthly payment on a 15-year loan is approximately 40 to 50 percent higher for the same loan amount. In San Diego's high-price market, this payment difference is often too large for most buyers to absorb comfortably.

Total Interest Cost Comparison

On a $700,000 San Diego loan at 7.0 percent for 30 years, you pay approximately $976,000 in total interest. At 6.5 percent for 15 years, you pay approximately $382,000 in total interest — a difference of nearly $600,000. This contrast makes the 15-year option very attractive for buyers who can afford the higher mandatory payment.

The Hybrid Strategy

Many financial advisors suggest taking a 30-year mortgage for the payment flexibility but making additional principal payments each month when cash flow allows — achieving faster payoff without the rigid higher payment of a 15-year term. In San Diego's expensive market, this flexibility is often more practical. Consult your financial advisor for guidance specific to your situation.

Related Reading on RiederHomes.com:

→ Blog #7: Understanding Interest Rates

→ Blog #2: Mortgage Pre-Approval

→ Blog #1: How Much Can I Afford?

→ Blog #3: Types of Home Loans

— Mance Rieder, Broker Associate | Rieder Homes Group | REAL Broker | riederhomes.com | 858-295-0556