If you’re looking to refinance your 30-year mortgage, you might consider refinancing into a 15-year mortgage. You’d be in good company; according to recent refinancing data, 30% of homeowners who refinanced their 30-year fixed rate mortgage in the last quarter decided to refinance into a 15-year loan. For homeowners who are comfortable paying a higher monthly payment, a 15-year mortgage can save a homeowner money in the following ways:
- 15-year mortgages almost always have a lower interest rate and APR than 20- or 30-year mortgages. This means you’ll be paying less money in interest to the bank.
- After 15 years, your mortgage will be paid in full, which means you won’t be paying interest as long as with a 20- or 30-year mortgage.
To put this in perspective, let’s consider an example from an article at themortgagereports.com:
“At today’s mortgage rates, assuming a loan size at the national average of $268,500, homeowners with a 15-year loan will pay $199,999 less mortgage interest as compared to a comparable 30-year fixed rate mortgage– a savings of 64%.”
These numbers look pretty attractive, especially to homeowners who could then put those savings towards their child’s college tuition or their own retirement funds. But can you afford the higher monthly payments that come with a 15-year mortgage? I’ve provided an easy-to-use mortgage calculator on my website to help in your decision. Click here to compare 15- and 30-year mortgage terms to get a better idea of your monthly payments.
For a more detailed analysis, or more information about other refinancing options, contact me today. My goal is to provide each of my clients with expert advice and to help find a refinancing solution that is right for their specific situation. I look forward to hearing from you!