Should You Refinance to a 15-Year Mortgage?

If you’ve been thinking of refinancing your mortgage, today’s low rates make now a good time to do it. Perhaps you’ve considered switching from a 30-year mortgage to a 15-year loan, but you’re not sure if it’s a smart move for you. Answering these questions can help lead you to a decision.

Which is more important to you: keeping mortgage payments low or paying less over the life of the loan?

Monthly mortgage payments are likely to be higher if you refinance from a 30-year to a 15-year mortgage. It depends on how much of your original mortgage you’ve paid down, what your interest rate is and other factors. But over the term of a 15-year mortgage, you’ll pay far less interest — often tens of thousands of dollars less. The savings come from two factors: 1) 15-year mortgages have lower interest rates than 30-year mortgages and 2) you’ll only make payments for half as long.

How long do you plan to stay in your home?

Refinancing a mortgage — no matter what the term — involves paying fees. You’ll recover that money by paying a lower interest rate, but it won’t happen immediately. Refinancing only makes sense if you plan to stick around long enough to recoup your added closing costs.

Is it important to you to own your home outright by a certain time?

Some people want to be liberated from mortgage payments when they retire or when their children enter college. Not having mortgage debt can free up money in your monthly budget for other priorities. You’ll get rid of mortgage payments in half the time with a 15-year mortgage compared to a 30-year one.

A mortgage specialist at Chemical Bank can help you run the numbers and decide if refinancing to a 15-year mortgage is the right move for you. Call (800) 867-9757 or visit to find a mortgage lender near you.