Today’s 15-year refinance rates

Why choose a 15-year refinance? 

If you currently have a 30-year mortgage and have room in your budget for a higher monthly mortgage payment, refinancing to a 15-year, fixed-rate loan can make good financial sense. You’ll still have the stability of knowing that the monthly payment won’t change, because the rate is fixed. And you’ll pay off your home faster, thus freeing up money for other financial goals, like retirement savings. 

"Refinancing to a 15-year mortgage from a 30-year mortgage can be a good choice if your goal is to pay your loan off quickly,” says Andrew Dehan, a senior analyst at Bankrate. “On top of that, you'll pay much less in total interest with the shorter-term loan. But keep in mind that, unless you score a significantly lower mortgage rate, your monthly payment with the 15-year mortgage could be much more than what it was with your 30-year loan.”

It could be a good time to look into refinancing into a 15-year mortgage if you’re in one of the following situations:

• You’ve gotten a big raise: Say you took out a 30-year mortgage five years ago, but your income has increased considerably since then. It could make sense to refinance into a 15-year loan. Your payments will be higher, but your higher income would allow you to absorb the new cost and pay down your loan in half the time.
• The new payments won’t be much higher: It’s also worth considering if your new monthly payments will wind up being similar to what you’re already paying with your current mortgage. This can be especially compelling if your credit score has improved significantly, for example, or if you want to refinance out of an FHA mortgage and its steep mortgage insurance premiums.
• You're halfway into a 30-year mortgage: If you’re at the halfway point of your 30-year loan, the time could be right for refinancing to a 15-year one. For one thing, your current rate could be much higher than what you’d pay if you refinanced today. For another, you’ll have a lower principal balance after all those years of repayment.

How to refinance into a 15-year loan

"The process of refinancing is not unlike buying a home — just a little simpler,” Dehan says. You don’t have to go house hunting or negotiate with a seller, but you’ll still have a lot of documentation to manage. “In most cases, you'll have to submit the same amount of paperwork as with a purchase mortgage, and the whole process will take about four to six weeks."

Here’s what the process should look like, from start to finish:

Alternatives to a 15-year mortgage refinance

The 30-year and 15-year mortgage terms get all the attention, but they’re not the only games in town.

“Another option, if you want to shorten your loan-term, is refinancing to a 20-year loan,” Dehan says. “This option pays off your loan 10 years sooner than a 30-year, but still has a lower monthly payment than a 15-year."

And if you really want to pay off your mortgage debt fast, you can opt for a 10-year term to speed up your repayment rate even further. 

You can also speed up your repayments without taking on a new loan simply by making extra payments or putting a little more toward the principal each month on your existing mortgage. Or you could set up automated biweekly payments — this strategy means you essentially make an extra monthly payment over the course of a year. (Make sure that your lender is applying your biweekly payments to your principal.) In any of these scenarios, you’ll pay down your principal faster than 30 years.