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I have a 30 year mortgage at 5.25%, my bank is offering a 15 year mortgage at 4.375% which will cost me $ 200 more a month than the 30 year, but I figured my overall savings will be $ 62,640 (even counting in the extra $ 200 a month I will pay) if I switch to the 15 year, and the bank closing costs will be refunded to me in yearly payments during the 15 year life of the loan. My other option would be to keep my 30 year mortgage, which has 22.5 years to go, and pay extra money toward the principle to shorten the time of the loan.

3 Thoughts on Should I refinancing my mortgage from 30 years to 15 years?
  1. Reply
    David M
    March 31, 2013 at 9:23 pm

    Lower interest and paying off debt is always the better option if you can afford the higher payment.

  2. Reply
    LA Boston Gal
    March 31, 2013 at 9:26 pm

    Sounds like a good deal for only $ 200 more a month and you won’t have to worry about your mortgage!. There are comparison calculators out there – I like to use the Mortgage Professor website- he was a Finance professor at Wharton and has some good articles on his site. There are comparison calculators that will tell you which option you should go with based on how long it takes for you to recoup your costs. If you have a solid job and don’t have to worry about being laid off any time soon then the 15 year sounds like a solid option. You didn’t mention your age or whether or not you’re already maximizing your other retirement savings options but if you’re close to retirement (15 years or less to go) then I’d refi to the 15 year.

    If you have more than 30 years until retirement, that might be different – because you’d want to really put your money where it can earn the best return for your situation. If you’ve got more than 30 years to retirement – consult with your financial planner before deciding.

  3. Reply
    Let me steer you
    March 31, 2013 at 10:06 pm

    Check here to see what you would save if you just put another $ 200 against the principle each month.

    http://tcalc.timevalue.com/all-financial-calculators/mortgage-calculators/early-mortgage-payoff-calculator.aspx

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