Refinance Calculator 15 Year Fixed
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Reviewed by Calculator Editorial Team
Use this refinance calculator to determine if switching to a 15-year fixed rate mortgage will save you money compared to your current loan. Compare monthly payments, total interest paid, and break-even points to make an informed decision.
How to Use This Calculator
Enter your current loan details and the proposed 15-year fixed rate mortgage terms to calculate the potential savings. The calculator will show you:
- Monthly payment comparison
- Total interest paid over the life of the loan
- Break-even point (how long it takes to recover the refinancing costs)
- Amortization schedule comparison
Use the results to decide whether refinancing makes financial sense for your situation.
Formula Used
Monthly Payment Calculation
The monthly payment for a loan is calculated using the formula:
M = P [ i(1 + i)n ] / [ (1 + i)n - 1 ]
Where:
- M = monthly payment
- P = principal loan amount
- i = monthly interest rate (annual rate divided by 12)
- n = number of payments (loan term in years × 12)
Total Interest Paid
Total interest paid is calculated by multiplying the monthly payment by the number of payments and subtracting the original loan amount.
Worked Example
Let's say you have a $200,000 mortgage with a 5-year fixed rate of 4.5% and you're considering refinancing to a 15-year fixed rate of 3.5%.
Using the calculator:
- Enter $200,000 as the current loan amount
- Enter 4.5% as the current interest rate
- Enter 5 as the current loan term
- Enter 3.5% as the new interest rate
- Enter 15 as the new loan term
- Click "Calculate"
The calculator will show that your monthly payment would decrease from $443.20 to $1,389.67, saving you $3,043.93 per month. However, you would pay $10,120 more in total interest over the life of the loan.
Benefits of a 15-Year Fixed Refinance
A 15-year fixed rate refinance offers several advantages:
- Lower monthly payments: Shorter loan terms typically result in smaller monthly payments
- Potential tax benefits: Some homeowners can deduct mortgage interest and property taxes
- Stability: Fixed rates provide price protection against rising interest rates
- Faster payoff: You can pay off your mortgage earlier, saving on interest
Important Note
While a 15-year refinance can save you money on monthly payments, it may cost more in total interest over the life of the loan. Always consider your financial goals and risk tolerance before refinancing.
Key Considerations
Before refinancing to a 15-year fixed rate, consider these factors:
| Factor | Consideration |
|---|---|
| Refinancing costs | Closing costs typically range from 2% to 5% of the loan amount |
| Interest rate changes | Fixed rates protect you from rising rates but don't benefit from falling rates |
| Loan term | Shorter terms mean higher monthly payments but lower total interest |
| Credit score | You'll need good credit to qualify for a lower interest rate |
Frequently Asked Questions
How much can I save by refinancing to a 15-year fixed rate?
The savings depend on your current loan terms, interest rates, and the new rate you qualify for. Use this calculator to estimate your potential savings based on your specific situation.
Is a 15-year fixed refinance right for me?
A 15-year fixed refinance may be right for you if you want lower monthly payments and don't plan to stay in your home for more than 15 years. However, it may cost more in total interest than a longer-term loan.
What are the closing costs for refinancing?
Refinancing typically costs between 2% and 5% of the loan amount, including fees for appraisal, title insurance, and other expenses. These costs are usually rolled into your new loan.
How does a 15-year fixed refinance compare to a 30-year fixed?
A 15-year fixed refinance typically has lower monthly payments but higher total interest costs. A 30-year fixed may have higher monthly payments but lower total interest over the life of the loan.
Can I refinance if I have bad credit?
It's more difficult to refinance with bad credit, but some lenders offer refinancing options for borrowers with lower credit scores. You may need to pay higher interest rates or closing costs.