Key Takeaways
- Refinancing a 15-year fixed mortgage may help lower your monthly payment, rate, or loan term—but timing matters.
- Consider refinancing when rates drop, income changes, or you want to switch to a 30-year loan.
- Evaluate your break-even point, equity, and long-term financial goals before refinancing.
- Lenders assess your credit, home value, and mortgage payment history before approval.
- The Molly Dean Mortgage Team offers personal guidance to help you refinance at the right time.
When to Refinance a 15 Year Fixed Rate Mortgage
A 15-year fixed rate mortgage is known for saving homeowners thousands in interest and building equity fast—but that doesn’t mean it’s always the best long-term fit. If you’ve locked into a 15-year loan and your financial goals have shifted, refinancing could be a smart move. The question is: when?
This guide from the Molly Dean Mortgage Team explains when to refinance a 15-year fixed rate mortgage, what to watch for, and how to knowif you’re financially ready.
Why Do Homeowners Refinance a 15-Year Mortgage?
While 15-year fixed mortgages offer faster payoff and less interest overall, they also come with higher monthly payments. Homeowners often refinance a 15-year loan for one of the following reasons:
- Reduce monthly expensesby switching to a 20- or 30-year loan
- Lower interest rateto maximize savings without extending the term
- Access equitythrough a cash-out refinance
- Consolidate debtusing lower mortgage interest
- Adjust financial plansdue to job changes, retirement, or other life events
When Is the Right Time to Refinance a 15-Year Fixed Rate Mortgage?
Here are signs that refinancing your 15-year mortgage might make financial sense:
1. Interest Rates Have Dropped
If today’s rates are at least 0.5–1% lower than your current rate, refinancing could save you money—even on a short-term loan.
2. Your Monthly Budget Is Tight
If the higher monthly payment on a 15-year loan is becoming difficult, switching to a longer-term mortgage can improve cash flow.
3. You’re Nearing Retirement
Reducing fixed monthly expenses in retirement is often a top priority. A refinance may help manage income more conservatively.
4. You Want to Pay Off Debt or Renovate
A cash-out refinance from your 15-year mortgage may unlock equity for home improvements or high-interest debt repayment.
5. You Plan to Move Within a Few Years
In this case, a refinance may only be worthwhile if you’ll break even before you sell the home.
Pros and Cons of Refinancing a 15-Year Mortgage
Pros
- Lower monthly payments with a longer loan term
- Opportunity to cash out equity
- Potentially secure a lower rate
- Adjust your financial strategy during life changes
Cons
- Could increase total interest over time if extending the loan
- May reset your amortization schedule
- Closing costs can outweigh savings if you refinance too soon
We’ll help you weigh the pros and cons based on your exact loan balance, home value, and financial goals.
What Are Your Refinance Options?
If you’re refinancing a 15-year mortgage, you have multiple options:
- Another 15-year fixed mortgageat a lower rate
- 20-year or 30-year mortgagefor reduced monthly payments
- Cash-out refinanceto tap into equity
- FHA or VA refinance, if eligible, for more flexible requirements
We’ll walk you through the numbers and recommend the best structure based on your goals.
How to Know If You’ll Save Money
Use this formula to determine your break-even point:
Break-Even Point = Total Closing Costs ÷ Monthly Savings
If you save $200/month and pay $4,000 in closing costs, your break-even point is 20 months. If you plan to stay in the home longer than that, refinancing may be worth it.
Our Refinance Calculatorcan help estimate your potential savings. Or contact us for a custom breakdown.
Requirements to Refinance Your 15-Year Loan
To get approved for a refinance, lenders typically check:
- Credit score(620+ preferred)
- Loan-to-value ratio(80% or lower for best rates)
- Debt-to-income ratio(preferably under 43%)
- Stable income and employment
- On-time payment historyon your current mortgage
Our team helps you gather the right documentation and improve your approval chances.
Can You Refinance Into Another 15-Year Loan?
Absolutely. Many homeowners refinance a 15-year mortgage into another 15-year term when:
- Market rates drop
- They want to avoid extending the loan term
- They want to remove PMI or reduce fees
- They want better loan terms from a new lender
You can also pay off your new 30-year loan early if you want flexibility with monthly budgeting.
Get Expert Advice on Refinancing Your 15-Year Mortgage
Refinancinga 15-year fixed rate mortgage isn’t just about chasing lower rates—it’s about aligning your mortgage with your lifestyle, income, and future plans. Whether you’re looking to reduce payments, access equity, or restructure your finances, the Molly Dean Mortgage Team is here to help.
Let’s explore your options.
Contact us today or use our Refinance Calculatorto find out if refinancing your 15-year mortgage is the right move.
Molly Dean
Molly Dean is consistently ranked as one of the top loan officers in the nation! Her knowledge of products and programs allows her the ability to help her borrowers find the program that best fits their individual needs.
Molly understands that when shopping for a mortgage professional, you need an individual and a team you can rely on. Molly’s goal is to help you in a fast and friendly manner.
Molly Dean and her team have a combined experience of 50+ years. Molly and her team work endlessly to make the purchase of a home as smooth as possible from start to finish. Molly and her team specialize in Conventional, FHA, VA, USDA, 203K, and Reverse loans.
