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Should I Refinance My Home To A 15-Year Mortgage?

You may be considering refinancing your home to a 15-year mortgage to lock in a lower rate with rates dropping in our current economic climate. When considering converting, you need to know how your finances will be affected in the short and long-term so you can make a responsible, informed decision about your home mortgage.

IS A 15-YEAR MORTGAGE RIGHT FOR YOU?

Here are several reasons a refinance to a 15-year mortgage could make sense for you...
    - When you want to pay off your home sooner (usually at a lower interest rate).
    - When you want to increase your home equity faster.
    - When you want to save thousands of dollars in interest over the life of the loan.
    - When you can afford to increase your existing monthly mortgage payments without cutting things too close.


A 15-year mortgage may be beneficial if you have sufficient cash flow, despite having higher monthly payments. If you have been in your home for several years and have a monthly budget and income that allow the higher payment without monthly budget strains, then this can make sense for you. Also, if your home's value has increased since you financed your original mortgage loan, then a 15-year mortgage may work as you will have a lower loan-to-value ratio. Ideally, you want to refinance to a shorter-term loan when interest rates are falling.

WHEN A 15-YEAR MORTGAGE MAY NOT BE RIGHT FOR YOU?

Here are a few reasons a refinance to a 15-year mortgage could hurt more than help you.

Lack of Emergency Funds
Having access to at least three to six months of emergency funds is crucial for you and your family in case you lose your job or cannot work for extended periods of time.

Monthly Budget Strain
If increasing your monthly mortgage payments could potentially hurt your monthly budget (especially if you're on a fixed income), then this may not make sense for you.

Other Goals
Refinancing to a 15-year mortgage may not be good for you if paying higher monthly mortgage payments could jeopardize other important goals (or plans) you have for this money (like investing, retirement, paying high-interest debt).


When considering converting to a 15-year mortgage, you should carefully consider the impact on your finances short and long-term compared to your current 30-year mortgage. Paying off your mortgage early means you may have less money to save for the future so you need to know exactly how this decision will affect your financial goals.

Use our Mortgage Comparison Calculator to help you decide if a 15-year mortgage could work for you.

If you feel a 15-year mortgage could be right for you, call 407-835-3500 and speak with one of our real estate experts at Orlando Credit Union today to learn more about our home loan options.