You can refinance from a 30-year mortgage to a 15-year mortgage by replacing your current loan with a new 15-year home loan.
A shorter term can help you pay off the mortgage sooner, build equity faster and reduce the total interest charged over the remaining life of the loan. The trade-off is a higher required monthly payment, along with the closing costs of refinancing.
The decision depends on your current mortgage rate, remaining term, new refinance rate, loan balance and monthly budget. A 15-year refinance can produce substantial long-term savings, but it is not the only way to pay off a mortgage early.
30-Year to 15-Year Refinance Basics
| Feature |
What Changes With a 15-Year Refinance |
| Repayment term |
The new mortgage is scheduled to be paid off over 15 years. |
| Monthly payment |
Principal and interest will usually increase because the balance is repaid over fewer months. |
| Interest rate |
A 15-year mortgage may have a lower rate than a comparable 30-year loan, but available pricing depends on the market and your qualifications. |
| Total interest |
You can pay substantially less interest when the balance is repaid faster. |
| Home equity |
More of each early payment generally goes toward principal, helping equity grow faster. |
| Closing costs |
The refinance can include lender, appraisal, title and settlement charges. |
Why Refinance From a 30-Year to a 15-Year Mortgage?
Pay Off Your Mortgage Sooner
A 15-year refinance creates a scheduled payoff date 15 years after the new loan begins. This can be useful if your goal is to own the home without a mortgage before retirement or another financial milestone.
Refinancing does restart the loan with a new term. If you are already several years into your current mortgage, compare the new 15-year payoff date with the amount of time remaining on the existing loan.
Reduce Total Interest
A shorter repayment period gives interest less time to accumulate. A 15-year mortgage may also carry a lower interest rate than a comparable 30-year mortgage.
The actual savings depend on the new rate, closing costs and how long you would otherwise keep the current loan. Compare the remaining interest on your existing mortgage rather than the original 30-year interest estimate from when you bought the home.
Build Home Equity Faster
Mortgage payments are divided between principal and interest. With a shorter term, more principal must be repaid each month.
This can increase your equity faster, although changes in the property’s market value can also raise or lower your total equity.
Receive a Fixed Payoff Schedule
Voluntary extra payments can be stopped when your budget becomes tight. A 15-year mortgage makes the accelerated payoff part of the required payment schedule.
That structure can support borrowers who want a firm repayment plan, but it also reduces monthly flexibility.
The broader differences between a 30-year and 15-year mortgage include payment size, interest cost and repayment speed.
How Much Can You Save by Refinancing to 15 Years?
The savings calculation should compare the remaining cost of your current mortgage with the cost of the proposed refinance.
30-Year to 15-Year Refinance Example
Assume you currently have:
- A $300,000 remaining mortgage balance
- 25 years left on the existing loan
- A 6.50% fixed interest rate
- A monthly principal and interest payment of about $2,026
Now assume you refinance the $300,000 balance into:
- A new 15-year mortgage
- A 5.75% fixed interest rate
- A monthly principal and interest payment of about $2,491
| Comparison |
Keep Current Mortgage |
Refinance to 15 Years |
| Remaining term |
25 years |
15 years |
| Monthly principal and interest |
About $2,026 |
About $2,491 |
| Remaining scheduled interest |
About $307,686 |
About $148,421 |
| Difference |
Higher total interest |
About $159,265 less scheduled interest before closing costs |
In this example, the refinance increases the monthly principal and interest payment by about $466 but reduces the scheduled payoff period by 10 years.
The estimated interest savings do not include closing costs, changes in mortgage insurance or costs added to the new balance. The rates are hypothetical and are used only to show how the calculation works.
When Does Refinancing to a 15-Year Mortgage Make Sense?
A 30-to-15-year refinance may make sense when:
- Your income can comfortably support the higher required payment.
- The new interest rate is lower than or competitive with your current rate.
- You plan to keep the home long enough to recover the closing costs.
- You want the mortgage paid off before retirement.
- You have an emergency fund and are meeting other financial priorities.
- The shorter term does not prevent you from saving for retirement or paying higher-cost debt.
The factors involved in deciding when to refinance your mortgage include the new rate, closing costs, expected ownership period and reason for replacing the loan.
When Might a 15-Year Refinance Be a Poor Fit?
A shorter refinance may create too much pressure on your monthly budget when:
- Your income is variable or uncertain.
- You have limited emergency savings.
- You carry higher-interest credit card or personal loan debt.
- The new rate is higher than your current mortgage rate.
- You expect to sell the home soon.
- You need monthly flexibility for child care, medical costs or other obligations.
- The refinance costs are too high to recover within your expected ownership period.
A lower total interest estimate does not automatically make the refinance affordable. The required payment must fit your regular budget without depending on overtime, bonuses or withdrawals from savings.
How Do Closing Costs Affect the Savings?
Refinancing creates a new mortgage and can include origination fees, discount points, appraisal charges, title services, recording fees and prepaid expenses.
A basic break-even calculation is:
Refinance costs ÷ monthly savings = break-even period
That formula is most useful when a refinance lowers the payment. A 15-year refinance commonly raises the monthly payment, so there may be no payment-based break-even point.
Instead, compare the closing costs with:
- The reduction in total scheduled interest
- The faster principal repayment
- The earlier payoff date
- The amount of time you expect to keep the loan
You can use our refinance break-even calculator when the new loan produces monthly savings. For a shorter-term refinance, review the full amortization schedules and total loan costs as well.
Can You Qualify for the Higher 15-Year Payment?
The lender evaluates whether your income and financial profile support the proposed mortgage payment.
One part of that review is your debt-to-income ratio, or DTI. The Consumer Financial Protection Bureau defines DTI as your monthly debt payments divided by your gross monthly income.
The lender may include:
- The new principal and interest payment
- Property taxes
- Homeowners insurance
- Mortgage insurance
- Homeowners association dues
- Credit card minimum payments
- Auto, student and personal loan payments
- Other required monthly obligations
There is no single DTI limit that applies to every refinance. The acceptable ratio depends on the loan program, underwriting findings, credit, assets and lender requirements.
Even when the lender approves the loan, review whether the higher payment leaves enough room for repairs, emergencies and other savings goals.
Is Making Extra Principal Payments Better Than Refinancing?
You do not have to refinance to pay off a 30-year mortgage in 15 years. You can make additional principal payments on the existing loan if its terms allow them without a prepayment penalty.
This approach can provide several advantages:
- You keep your current mortgage rate.
- You avoid refinance closing costs.
- You can reduce or stop extra payments when your budget changes.
- The required monthly payment remains based on the original schedule.
The main drawback is that your regular payment does not change. You must consistently direct the additional amount toward principal to reach the earlier payoff date.
Use our extra mortgage payment calculator to estimate how additional principal payments could change your payoff date and total interest.
Example of the Extra-Payment Alternative
Suppose your required mortgage payment is $2,026 and the proposed 15-year refinance payment is $2,491. Instead of refinancing, you could consider paying an additional $465 toward principal each month.
The result would not exactly match the refinance because the interest rates and amortization schedules differ. However, the extra payments would reduce the balance faster while preserving the option to return to the lower required payment when needed.
Should You Choose a 20-Year Term Instead?
A 20-year refinance can provide a middle ground between the lower required payment of a 30-year loan and the faster repayment of a 15-year mortgage.
The monthly payment would generally be lower than a comparable 15-year payment but higher than a 30-year payment. Total interest would generally fall between the two options.
Comparing a 30-year and 20-year mortgage can help you determine whether a moderate term reduction fits your budget better.
Some lenders also offer 10-year terms. The differences between a 10-year and 15-year mortgage become most relevant when your income can support an even faster payoff.
The Bottom Line
You can refinance a 30-year mortgage into a 15-year loan if you qualify for the new payment and other underwriting requirements.
The shorter term can reduce total interest, build equity faster and move your payoff date forward. It will usually increase your required monthly principal and interest payment, and refinancing adds closing costs.
Compare the remaining cost of your current mortgage with the complete cost of the proposed 15-year loan. Making extra principal payments may provide a similar path toward early payoff without replacing a low-rate mortgage or committing to a higher required payment.
Frequently Asked Questions
Can You Refinance a 30-Year Mortgage Into a 15-Year Mortgage?
Yes. The new 15-year mortgage pays off and replaces the existing 30-year loan. You must qualify based on the new payment, credit, income, debts, property and loan-program requirements.
Is It Worth Refinancing From 30 Years to 15 Years?
It may be worth considering when the higher payment fits your budget, the interest savings exceed the closing costs and you plan to keep the mortgage long enough to benefit.
Will a 15-Year Refinance Double Your Payment?
Not necessarily. The payment depends on the remaining balance, current term, new rate and whether costs are financed. It will usually be higher because the balance is repaid over fewer months.
Do 15-Year Mortgages Have Lower Interest Rates?
Fifteen-year mortgages may have lower rates than comparable 30-year loans. The actual rate depends on market conditions, credit, equity, property and lender pricing.
Can You Refinance to a 15-Year Mortgage After Paying for Several Years?
Yes. Compare the new 15-year term with the number of years remaining on your current mortgage. Refinancing a loan with 18 years remaining into a new 15-year mortgage shortens the schedule by three years, not 15.
Can You Pay a 30-Year Mortgage Like a 15-Year Mortgage?
Yes. You can make extra principal payments that place the loan on a faster payoff schedule. Confirm that the servicer applies the additional amount to principal and that the mortgage has no prepayment penalty.
Is It Better to Refinance or Make Extra Payments?
Refinancing may provide a lower rate and a fixed 15-year repayment schedule. Extra payments avoid closing costs and preserve the lower required payment. The better option depends on your current rate, proposed rate and need for flexibility.
Can You Refinance to a 20-Year Mortgage Instead?
Yes, if a 20-year term is available. It can reduce the payoff period while requiring a smaller payment increase than a 15-year refinance.
Does Refinancing to 15 Years Build Equity Faster?
Yes. A larger share of the required payment generally goes toward principal because the balance must be repaid over fewer months. Property-value changes also affect total equity.
Does a 15-Year Refinance Have Closing Costs?
Yes. A 15-year refinance can include lender charges, discount points, appraisal fees, title costs, recording fees and prepaid expenses. Review the Loan Estimate and Closing Disclosure before accepting the new mortgage.
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