15+year+mortgage+calculator+refinance
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Reviewed by Calculator Editorial Team
Refinancing your 15-year mortgage can offer significant savings on interest payments and potentially lower your monthly payments. This calculator helps you estimate your potential savings and new payment amounts when considering a refinance.
How to Refinance a 15+Year Mortgage
Refinancing your existing mortgage to a 15-year term involves several steps:
- Check your credit score - A higher credit score typically qualifies you for better interest rates.
- Compare current and new rates - Use our calculator to estimate potential savings.
- Gather documentation - You'll need proof of income, asset statements, and property information.
- Choose a lender - Compare offers from different lenders.
- Apply for the refinance - Submit your application and wait for approval.
- Close on the new mortgage - Pay off your old mortgage and receive your new loan.
Important Note
Refinancing may not always be the best option. Consider factors like closing costs, the length of your remaining mortgage term, and whether you plan to stay in the home long-term.
Benefits of Refinancing
Refinancing your 15-year mortgage can offer several advantages:
- Lower interest rates - Current lower rates can reduce your monthly payments.
- Shorter loan term - Paying off your mortgage faster can save thousands in interest.
- Cash-out option - Access equity in your home for major expenses.
- Change loan type - Switch from an adjustable-rate to a fixed-rate mortgage.
Interest Savings Formula
Total interest saved = (Original loan amount × original interest rate × original term) - (Original loan amount × new interest rate × new term)
Key Considerations
Before refinancing, consider these important factors:
| Factor | Consideration |
|---|---|
| Closing costs | Typically 2-5% of the loan amount |
| Remaining term | Refinancing may not save money if you plan to sell soon |
| Credit score | Higher scores get better rates |
| Loan type | Consider switching from ARM to fixed-rate |
Refinancing can be complex. Working with a mortgage professional can help you make the best decision for your situation.
Worked Example
Let's look at a hypothetical example to illustrate how refinancing can work:
Example Scenario
Current mortgage: $200,000 at 4.5% interest for 15 years
New mortgage: $200,000 at 3.5% interest for 15 years
Closing costs: $3,000
Using our calculator, we can estimate:
- Original monthly payment: $1,294.86
- New monthly payment: $1,162.04
- Monthly savings: $132.82
- Total interest paid over 15 years: $11,748.60
- Total interest saved: $1,748.60
After accounting for closing costs, you would need to save about 2.5 years of monthly payments to break even on the refinance.
FAQ
How much can I save by refinancing my 15-year mortgage?
Savings depend on your current interest rate, the new rate you qualify for, and your remaining mortgage term. Use our calculator to estimate potential savings based on your specific situation.
What are the closing costs for refinancing?
Typical closing costs range from 2-5% of the loan amount. These may include appraisal fees, title insurance, and origination fees.
Should I refinance if I plan to sell soon?
Refinancing may not be beneficial if you plan to sell within a few years, as the savings may be offset by closing costs and the shorter remaining term.
Can I refinance from a 30-year to a 15-year mortgage?
Yes, you can refinance from a 30-year to a 15-year mortgage, which can significantly reduce your monthly payments and pay off the loan faster.