Pros and Cons of Refinancing into a 15-Year Mortgage

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If you’re like most homeowners, you have a 30 year fixed-rate mortgage on your home.

Many homeowners are switching from their 30 year mortgage term to a 15 year loan to reduce their interest rate and pay off their home quicker.

But does this mean a 15 year mortgage is good for you?

In this article we’re going to explore some of the pros and cons of the 15 year mortgage so you can decide for yourself.

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Pros and Cons of a 15 Year Mortgage Term

If you can afford the higher monthly payment then a 15 year mortgage makes a lot of sense. Not only will you pay off your home in half the time, you will get a lower interest rate as well. This will save you big time at the end of the loan.

But 15 year loans aren’t for everyone, even if you can afford the higher payment you need to evaluate your financial situation to ensure it is something that will work for you.


  • Lower your interest rate – The interest rate on 15 year loans is usually much lower, sometimes as much as 1 point lower.
  • Pay off your mortgage faster – Pay off your mortgage in half the time
  • Pay less total interest over the life of the loan – By paying the loan off much quicker, with a lower interest rate you will save tens of thousands of dollars.


  • Higher monthly payment – Monthly payment is usually several hundreds dollars per month higher
  • Less available cash each month – Because of the higher monthly mortgage payment you will have less expendable cash each month.

30 Year Mortgage Flexibility

The biggest benefit of a 30 year mortgage is the low monthly mortgage payment. The payment on a 30-year loan is usually several hundreds dollars a month cheaper than a 15 year term.

You can always pay extra each month and that money goes straight to the principle balance, helping you pay off your mortgage earlier. A 30 yr loan gives you the flexibility to pay more or less, you’re not locked into a higher payment like you are with a 15 year mortgage.

This is advantageous because in the event of a financial crisis you will not be committed to the higher payment.

Alternative to Refinancing into a 15 Year Mortgage

You can always pay a little extra towards your mortgage balance at any time. You can pay enough extra each month to pay off your loan in the same 15 years. Yes, your interest rate will be higher than if you refinanced, but you have the flexibility to not pay that extra amount if times ever get tough. This flexibility is really great to have in the event you ever need it.

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