Get Help Finding the Best 15-Year Refi for Your Home
Published April 16, 2022
Whether you currently have an adjustable-rate mortgage or a 30-year fixed-rate mortgage, refinancing into a 15-year loan could be financially beneficial. With the right approach, the interest rates available with a 15-year refinance can be considerably lower than the rate tied to your current mortgage. Historically, 15-year refinance rates have only improved. If you're considering a refinance, the best 15-year refinance rates could be yet to come.
The short history of the 15-year refinance
The 15-year fixed-rate mortgage and refinance loans were initially brought to the market in 1991. When these loans were first introduced, they came with interest rates nearing 9%. Since then, rates have dropped relatively consistently until hitting a low of 2.15%, which came in August 2021. During the 1990s, interest rates with a 15-year mortgage and refinance loans oscillated between 6-8%.
After the stock market crash of 2008, average interest rates for 15-year refinance loans fell below 5%. Since that time, the average rate hasn't risen above 5%. This has provided homeowners and new buyers alike with some consistency and dependability in the interest rates they expect when refinancing.
If you want to refinance your current mortgage, changing over to a 15-year fixed-rate loan should provide you with lower interest rates. Since rates have dropped consistently since the 15-year mortgage was introduced in 1991, the interest rate for your existing mortgage is likely much higher than what you would receive when refinancing your home with a 15-year mortgage.
The best 15-year refi rates aside, 15-year loans almost always have a lower interest rate than 30-year mortgages. You are almost guaranteed to secure a lower interest rate by refinancing into a shorter loan term, regardless of the market's behavior. To that end, because your repayment term will be shorter with a 15-year loan, you'll pay far less in interest over the life of the loan – sometimes in the hundreds of thousands of dollars.
Best 15-year refinance options
There are several types of 15-year refinance loans, each with its own benefits and disadvantages. Most homeowners will opt for conventional mortgages, but specific populations can access lower rates and more favorable terms with FHA and VA refinancing.
Still, the best 15-year refi largely depends on the state of your current mortgage. If your loan is in good health, and if you are in good financial standing, you will be able to access a more favorable interest rate. Keep in mind that FHA loans and VA loans, which offer some of the lowest rates available, are backed by the Federal Housing Administration and the Department of Veterans Affairs, respectively. If you've qualified for one of these mortgages in the past, there's a good chance that you'll be eligible for an FHA or VA refinance.
If you're searching for the best 15-year refi rates, note that loans with the lowest rates aren't always the most helpful for your specific financial situation. For example, the best 15-year refi loans might have low fees or no closing costs for some homeowners. This can be an excellent option for borrowers who want to refinance but don't want to take on closing costs up-front. Instead, you can work with your lender to reassign those costs to a different part of the loan, either rolling it into the principal amount or increasing your interest rate.
Once you select the best 15-year refi option for your home, you should look forward to a lower interest rate, reduced monthly payments, and/or fast-accumulating home equity – whichever is the goal of the mortgage refinance.
Don't Wait Around for Rates to Drop to Refinance
If you're ready to begin your refinance, don't wait around for rates to drop. While 15-year refinance rates have declined over time, it's impossible to predict how you might benefit by waiting a couple of years to initiate the refinance. If you've found the best 15-year refinance option for your financial future, act as soon as possible. If interest begins increasing in several months' time, it may not drop to a preferred rate for years.
There's also a chance that your financial situation could change while waiting for the perfect rates. For example, if your financial health takes a hit, you may not have access to competitively low rates when you finally refinance.
Choosing to refinance your mortgage can be a difficult decision. Schedule an appointment if you're not sure how to find the best 15-year refi rates for your mortgage. We can work with you to figure out which move will help you meet your financial goals. In the meantime, use our mortgage calculator to see how much you could benefit from a 15-year refinance.