When to Act and Refinance a Mortgage From 30 to 15 Years

Published March 31, 2022

Homeowners who want to refinance a mortgage from 30 to 15 years are motivated to own their home outright. So, if you’re looking to pay down your mortgage faster and more efficiently, this type of refinance might be for you. But, once you decide that a refinance is a good option, the question becomes: Is now the right time to refinance? 

Ever-changing interest rates may make you hesitate when you start the refinancing process. As you consider whether a 30- to 15-year refinance makes sense for you, give some thought to whether you fit into the following categories:

• You can afford higher monthly payments.

• You have paid more than half of your 30-year mortgage.

• You haven’t refinanced for quite some time.

• You want to retire without a mortgage.

If any of the above criteria apply to your situation, it may be time to refinance your mortgage from 30 to 15 years. Still, before making any significant decisions, consider the full scope of your mortgage and financial circumstances. To see if you’re ready to take on a 15-year mortgage, here’s what you should evaluate.

What refinancing to a shorter-term loan means for homeowners

Deciding to refinance to a shorter-term loan may have different meanings for specific homeowners. However, the most obvious goal of this type of refinance is the ability to pay down your mortgage quicker. This can help homeowners save tens of thousands of dollars over the life of the loan. Additionally, if you refinance to a shorter mortgage, you can put more of your payments toward the loan’s principal balance.

Opting for a refinance mortgage from 30 to 15 years also means that you likely have consistent cash flow, and you feel comfortable enough to utilize it in larger mortgage payment sums. As a homeowner, this financial security can allow you to meet the higher monthly payments. 

Who should consider a 30- to 15-year refinance?

You may find yourself in one or more of the earlier categories that make refinancing a feasible option and a prudent decision. Of course, each homeowner has their own reasons for choosing to refinance, and if you are still undecided, we don’t blame you. Generally speaking, here are the catalyzing factors that cause people to make the jump into a 15-year refinance. 

• People can meet the monthly payments. This is a common reason why people feel confident in choosing to refinance a mortgage from 30 to 15 years. Nonetheless, these monthly payments can overwhelm people without a steady income. Consider the full scope of your finances before making the move to refinance. The process looks different for everyone, but a personal financial review can help you determine if you should wait to refinance until a later date. If you’re unsure where to start, we’re happy to help.

• Homeowners want to retire without a mortgage. Entering retirement without having to worry about monthly payments doesn’t need to be a pipe dream. People currently in their mid-40s can start considering the possibility of refinancing into a shorter term. Homeowners can develop more flexible budgets if they look ahead and refinance, especially if they plan on retiring early.

• People want financial discipline. If you’d like to refinance your mortgage from 30 to 15 years, you may already possess solid financial discipline. Sometimes homeowners with 30-year mortgages accelerate their payments rather than refinancing. Accelerating payments is one method but committing to a 15-year mortgage holds you to your plan.

When you’re ready to discuss a possible 30- to 15-year refinance for your mortgage, schedule an appointment online with us for a free mortgage review. You can also call (866) 891-7332 to discuss your mortgage or ask any questions about the refinancing process.

The benefits and disadvantages of a 15-year refinance

Homeowners can find specific advantages and disadvantages in all types of mortgages. However, if you refinance a mortgage from 30 to 15 years, you should feel confident that the financial move will be in your favor. Key advantages for getting a 15-year refinance include:

• Paying off the full amount faster. For example, when you switch from a 30- to a 15-year mortgage, you can pay off the total amount in half of the time. For many homeowners, this is the key benefit of this type of refinance. 

• Building equity quicker. If you choose a shorter-term mortgage, speeding up the process of owning your home outright is a clear advantage. In addition, a higher home equity after you refinance mortgage from 30 to 15 years can also apply to your future ability to take out any other home loans.

• Refinancing in the future becomes easier. Homeowners with greater equity find it easier to complete additional refinances. Even if you choose to refinance to a 15-year mortgage now, you can keep your options open in the future. If you decide to pursue a 10- or 12-year loan down the road, you can explore our personalized Your Term, Your Mortgage program.

While there are many benefits for refinancing into a shorter loan term, homeowners should also consider the disadvantages. For example, if you opt to refinance your mortgage from 30 to 15 years, you’ll pay more toward the loan each month. This, in turn, means you’ll have fewer funds available for other needs, like emergencies and investments.

Know your options with our mortgage calculator

Homeowners hoping to refinance can use our mortgage calculators to determine baseline eligibility and benefits. Compare your current mortgage with refinance options to get an idea of the potential cost savings. You can also use our calculators to estimate your monthly mortgage payments if you refinance your mortgage from 30 to 15 years. These mortgage calculators can help take the guesswork out of whether you should refinance now or later.