Should I refinance to a 15-year mortgage?

Homeowners thinking about a refinance usually notice that 15-year mortgage rates come in lower than 30-year loan rates.

This raises an important question: Should I refinance into a 15-year loan instead of another 30-year loan?

The answer, of course, depends on whether you can afford the monthly payment that's required to unlock all the interest savings.

...in as little as 3 minutes — no credit impact

What a 15-year refinance actually costs you each month

Because of their shorter terms, which give lenders half the time to charge interest, a 15-year loan can save hundreds of thousands in interest compared to a 30-year term.

Your actual savings would depend on your loan size and your home's current mortgage rate.

To access these savings, 15-year borrowers usually pay hundreds of dollars more per month.

Want to see your specific numbers? Use Better’s refinance calculator to model your scenario. Here’s how the payment math typically works on a mid-size loan balance:

Scenario	30-year refi at 6.72%	15-year refi at 6.10%	Monthly difference
$300,000 balance	~$1,950/month	~$2,550/month	+$600/month
$400,000 balance	~$2,600/month	~$3,400/month	+$800/month
$500,000 balance	~$3,250/month	~$4,250/month	+$1,000/month

Example is for illustrative purposes only. Rates, payments, and total interest will vary based on credit profile, loan terms, and market conditions.

The payment difference isn’t small. On most loan balances, you’re looking at $600 to $1,000 more per month. That’s a real commitment — not a rounding error in your monthly budget. Before you decide, be honest with yourself about whether that increase is comfortable, not just technically affordable. A budget that’s stretched thin every month leaves you vulnerable to unexpected expenses and limits your ability to invest, save, or handle a financial setback.

How to run your own numbers

The two most important variables are your current interest rate and your remaining loan balance. If your existing rate is close to 6.10%, the interest savings shrink and the closing costs become harder to justify. If your existing rate is 7% or higher, the savings can be substantial, but you still need to confirm the break-even timeline. Divide your total closing costs by the monthly savings the new loan generates. That’s how many months it takes to come out ahead. Most refinances cost between 2% and 5% of the loan amount. Read more about how much it costs to refinance before you finalize your decision.

The interest savings and when they actually matter

The headline number on a 15-year refinance is usually impressive. On a $400,000 balance, switching from a 30-year at 6.72% to a 15-year at 6.10% might save you $130,000 or more in total interest paid over the life of the loan.

But that number deserves some context: Specifically, where you are in your current loan.

Mortgages are front-loaded with interest. In the early years of a 30-year loan, the vast majority of each monthly payment goes toward interest rather than principal. As you get further into the loan, the balance shifts. If you’re eight years into a 30-year mortgage and you refinance to a new 15-year, you’re not shortening your total repayment by 15 years — you’re shortening it by roughly 7 years (from 22 remaining down to 15). The savings are real but more modest than the headline figure suggests.

Conversely, if you bought in 2022 or 2023 and are only a few years into a 30-year mortgage, refinancing to a 15-year really does meaningfully compress your total interest paid. You’re closer to the start of the amortization curve, where the compounding impact of a lower rate and shorter term is largest.

Understanding when to refinance your mortgage requires accounting for your loan age, not just the rate environment.

Five scenarios: who should and shouldn’t consider a 15-year refinance

The right answer isn’t the same for every homeowner. Here’s how to think about your specific situation.

You bought or refinanced in 2022–2024 at 7% or higher

This is the clearest case for running the numbers seriously. You’re likely in the first few years of a high-rate loan, meaning you’re still in the part of the amortization schedule where interest dominates your payment. A 15-year refinance today could lower your rate by close to a full percentage point and dramatically cut your total interest while also eliminating 15 years of payments. If your budget can absorb the payment increase, this cohort has the most to gain.

You have 20+ years left and a comfortable budget

If you have more than 20 years remaining on your current mortgage and your household income is stable enough that the higher payment doesn’t create stress, a 15-year refinance is worth modeling carefully. You’ll likely come out significantly ahead on total interest, your loan term shortens materially, and you’ll build equity faster which has its own financial value.

You'd like to unlock equity with a cash-out refinance

Cash-out refinancing trades your existing loan balance for a higher loan balance. You get to keep the extra cash to use for debt consolidation, home improvements, or making the down payment on a second home. Since the new loan pays off the old loan, homeowners will have the chance to switch to a 15-year loan term, assuming they can afford the payment.

Your income is variable, or your emergency fund is thin

The fixed nature of the 15-year payment is its strength and its risk. If you lose income, take a career break, face a major medical expense, or encounter any significant financial disruption, the higher required payment becomes a constraint rather than a choice. A 30-year payment with occasional extra principal payments gives you flexibility that a 15-year payment doesn’t. If your financial situation has any significant uncertainty, this matters more than the interest savings math.

You’re more than 15 years into your current loan

If you’re already a significant way through your mortgage — say, 15 to 20 years in — a full refinance to a new 15-year loan is rarely the optimal move. The math on closing costs versus remaining interest savings often doesn’t work, you’re resetting your amortization clock at least partially, and a better alternative may simply be to accelerate your existing loan by making extra principal payments.

...in as little as 3 minutes — no credit impact

The alternative nobody talks about enough: extra payments on your 30-year

Before committing to a 15-year refinance, it’s worth understanding what extra principal payments can do on a 30-year mortgage. Making one extra mortgage payment per year, or adding a fixed amount to each monthly payment, can cut four to six years off your loan without closing costs, without qualifying, and without locking yourself into a higher required payment. According to our guide on the fastest way to pay off your mortgage, extra payments work particularly well if your current rate is already reasonable, if you’re more than 10 years into your loan, or if your income isn’t predictable enough to commit to a permanently higher payment.

Extra payments are voluntary, which has pros and cons. On the con side, they require self-discipline. A 15-year refinance enforces the discipline structurally which is part of why some homeowners prefer it. But on the pro side, voluntary payments are more flexible. If you lose income or have an extra expense, you don't have to make the higher mortgage payment that month.

The honest comparison: if the rate gap between your current mortgage and the 15-year refinance rate is wide, the 15-year refinance will almost always generate more savings than extra payments alone. If the rate gap is narrow — say, less than 0.5 percentage points — extra payments may come close to matching the savings without the closing costs or the payment commitment.

What you need to qualify for a 15-year refinance

A 15-year refinance follows the same qualification standards as other rate-and-term refinances. The key requirements are covered in our refinance requirements guide, but here are the most relevant factors for this decision.

Equity

You’ll generally need at least 20% equity to avoid private mortgage insurance on a conventional refinance. If your equity position has grown since you bought, through appreciation or principal paydown, that works in your favor.

Credit score

A score of 720 or above typically unlocks the most competitive 15-year refinance rates. Scores between 680 and 720 can still qualify but may carry a slightly higher rate. Keep in mind that refinancing does affect your credit score temporarily, typically a small, short-lived dip from the hard inquiry.

Debt-to-income ratio with the new payment

Because a 15-year mortgage carries a higher monthly payment than a 30-year, your DTI will be higher on the new loan. Lenders typically look for a DTI below 43–45% for conventional refinances. Run the numbers with the higher payment factored in before applying.

How often you can refinance

There’s no universal limit on refinancing, but each refinance restarts your closing-cost clock. Our guide on how often you can refinance your home covers the practical considerations if this isn’t your first refinance.

FAQs about 15- vs 30-year refi

Should I refinance my 30-year mortgage to a 15-year mortgage?

It depends on three factors:

• whether today’s 15-year rate is meaningfully lower than your current rate
• whether the higher monthly payment fits your budget without straining your finances
• how many years you have left on your loan.

If your existing rate is 7% or higher, you’re in the early years of your mortgage, and the payment increase is manageable, a 15-year refinance is worth modeling carefully. If your rate is close to today’s 15-year rates or your budget is already stretched, it probably isn’t worth the closing costs.

How much more would I pay per month on a 15-year refinance?

The payment increase depends on your loan balance and the rate difference between your current loan and the 15-year refinance rate. On a $400,000 balance, moving from a 30-year at 6.72% to a 15-year at 6.10% increases your monthly principal and interest payment by roughly $800. On a $300,000 balance, the increase is closer to $600. Use Better’s refinance calculator to model your specific scenario.

Example is for illustrative purposes only. Rates, payments, and total interest will vary based on credit profile, loan terms, and market conditions.

Is it worth refinancing to a 15-year mortgage if I only have 20 years left?

It can be, but the math is less straightforward. You’d be refinancing a 20-year remaining term to a new 15-year loan, shortening your payoff by five years and potentially locking in a lower rate. The key variables are your current rate versus today’s 15-year rate, your loan balance, and whether the closing costs can be recouped within your planned time in the home.

What’s the break-even on a 15-year refinance?

Divide your total closing costs by the monthly payment savings the new loan generates. If closing costs are $8,000 and the new payment saves you $200 per month, your break-even is 40 months (roughly three and a half years). If you plan to stay in the home beyond that point, the refinance pays for itself. Note that on a 15-year refinance, the monthly payment is typically higher than your current 30-year payment, so the savings calculation focuses on total interest reduction over the life of the loan.

Should I refinance to a 15-year or just make extra payments on my 30-year?

Both strategies accelerate your payoff and reduce total interest. The 15-year refinance is more powerful when the rate gap is significant. Extra payments are better when the rate gap is narrow, closing costs are high, or you want to maintain the flexibility to scale back your payment in a tough month. If your income is variable or your emergency fund is lean, extra payments on a 30-year often make more practical sense.

What credit score do I need for a 15-year refinance?

A score of 720 or above typically qualifies you for the most competitive 15-year refinance rates on a conventional loan. Scores between 680 and 720 can still qualify, but expect a slightly higher rate.

Will refinancing to a 15-year mortgage hurt my credit?

Refinancing causes a small, temporary dip in your credit score from the hard inquiry during underwriting, typically 5 to 15 points, resolving within a few months. This is rarely a reason not to refinance if the financial case is strong, but worth knowing if you’re planning another major credit application in the near term.

Bottom line

The 15-year refinance question is really two questions in one: does the math work, and does the life situation work? The math, including rate gap, total interest savings, closing cost break-even, is calculable. Start with Better’s refinance calculator and run your specific numbers before drawing any conclusions.

The life situation question is harder and more personal. A 15-year mortgage payment is fixed and non-negotiable. If that payment is comfortable and your financial position is stable, the long-term interest savings are real and the faster equity build is real.

If the payment stretches you, the flexibility of a 30-year loan with extra payments may serve you better. Review the pros and cons of refinancing to make sure you’re weighing the full picture.

...in as little as 3 minutes — no credit impact

Rates and payment examples are for illustrative purposes only. Actual rates, payments, and total interest will vary based on credit score, loan amount, loan-to-value ratio, property type, and market conditions at the time of application. Better Mortgage is a direct lender. Loan approval is subject to underwriting review. Not all applicants will qualify. This article is for informational purposes only and does not constitute financial advice.