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15-Year Refinance Rates
Right now, 15-year mortgages have some of the lowest rates we’ve seen in the last 50 years. That may lead you to wonder whether this is the time to refinance. Well, if you have excellent credit and some equity in your home, you can lock in a 15-year fixed mortgage rate as low as 2.15% with some lenders right now. That means with refinance mortgage rates that low, you could save thousands in interest and help you become debt-free faster.
Using our SimpleScore methodology, we have analyzed some of the leading national 15-year mortgage lenders to compare the best refinance rates.
Compare today’s 15-year refinance rates
According to Bankrate’s latest survey of the nation’s largest mortgage lenders, these are the current refinance average rates for a 30-year, 15-year fixed and 5/1 adjustable-rate mortgage (ARM) refinance rates among others.
|30-Year Refinance Rate||2.950%||3.160%|
|30-Year FHA Refinance Rate||2.550%||3.410%|
|30-Year VA Refinance Rate||2.860%||3.090%|
|30-Year Jumbo Refinance Rate||2.980%||3.050%|
|20-Year Fixed Refinance Rate||2.890%||3.150%|
|15-Year Fixed Refinance Rate||2.430%||2.670%|
|15-Year Jumbo Refinance Rate||2.450%||2.510%|
|10/1 ARM Refinance Rate||3.250%||4.030%|
|5/1 ARM Refinance Rate||3.060%||4.060%|
|5/1 ARM Jumbo Refinance Rate||3.060%||4.030%|
|7/1 ARM Refinance Rate||3.020%||3.990%|
|7/1 ARM Refinance Jumbo Rate||3.110%||4.000%|
Rates data as of 1/19/2021
Why trust The Simple Dollar?
The SimpleScore is our proprietary scoring metric to compare products and services at The Simple Dollar in a transparent, evidence-based way. Our editorial team identifies five quantifiable aspects to compare for every brand, determines the rating criteria for each aspect score, then averages the five aspect scores to produce a single SimpleScore. For 15-year mortgages, we compared perks, credit impact to check rates, fees, customer satisfaction and product variety. Our ratings are meant to be a directional tool to help you in the process of choosing a 15-year mortgages.
15-year mortgage refinance companies at a glance
|Lender||Rates (APR)||Min. Credit Score||SimpleScore|
|Rocket Mortgage||2.625% (3.088% APR)||620||3.4/5|
|Navy Federal Credit Union||2.750% (3.224% APR)||Undisclosed||3.4/5|
|Chase||2.000% (2.173% APR)||620||3.8/5|
|PennyMac||2.250% (2.474% APR)||580||3.3/5|
|Bank of America||2.125% (2.454% APR)||600||3.8|
|Better.com||2.125% (2.209% APR)||620||3.8|
*Rates accurate as of November 2020.
What is a 15-year mortgage refinance?
A 15-year mortgage refinance is a mortgage loan that can be used to pay off the balance of your existing mortgage loan in 15 years. That’s a much shorter repayment term than the traditional 30-year loan term, which means your payments will be higher each month because you’ll be paying off the loan in half the time.
The upside to this type of loan is that it can vastly cut down on the amount of interest you pay in total. You’ll have to pay more each month on the principal, but 15-year loans generally come with lower interest rates than other types of loans and you’re paying interest for a shorter period too, making the savings two-fold.
How 15-year mortgage refinances work?
If you’re no longer satisfied with your existing mortgage terms, you may be able to change things by securing a new 15-year mortgage. The 15-year mortgage rates for refinance are generally lower than you’d get with other types of loans, and refinancing to this can be especially beneficial for those who have between 18-25 years left on their mortgage. These refinances could also benefit homeowners who are financially stable enough to afford a slightly higher monthly payment.
To obtain a 15-year refinance, your lender will have you complete a similar process to the one you completed when you first took out your mortgage. You’ll also need to calculate the amount remaining on your existing mortgage, the origination fee and other applicable loan fees and any down payment amounts or discount points needed to finalize the refinance. This will tell you whether you can afford the loan and what you’ll save by refinancing.
These costs, along with the principal and interest, are rolled into a new mortgage at the current interest rate and scheduled for a 15-year payoff term.
New mortgage terms
When refinancing your mortgage loan, your refi lender has the opportunity to set new mortgage terms. This can work in your favor, especially if interest rates have dropped or your mortgage lender is offering promotional terms for refinancing. Be sure to compare the loan terms — including interest rate, repayment schedule, loan origination fees and early payoff penalties — to your current loan terms, though, to make sure refinancing makes good financial sense before moving forward.
Higher monthly payments vs. less interest cost
If your interest rates go down, our monthly payment amount will still go up with a 15-year mortgage refinance. That’s because you’re cutting your repayment schedule in half — so higher payments are required to pay the loan back in that time frame.
Still, lowering your interest rate and paying off your mortgage sooner will still save you money in the long run. If, for example, you have 22 years remaining on a $300,000 mortgage at 4.5% interest, your monthly payments would be approximately $1,520 and you would have about $401,295 left to pay on your mortgage.
With a 15-year refinance at 3.25% interest, your monthly payments would increase to $2,085.50, but your mortgage would be paid off seven years sooner and save you over $25,000 in interest over the life of the refinance.
Pros and cons of a 15-year mortgage refinance
|Lower interest rates||Monthly payment amount will increase|
|Savings over the loan life||Lenders may change loan terms|
|Become debt-free sooner||Additional closing costs|
How to choose the best 15-year mortgage refinance for you
- Conduct a thorough credit review. If you haven’t checked your credit recently, you’ll want to start the process of shopping for a refinance by making sure your credit is in pristine condition. Even a 20 point decrease in your credit scores can easily cost you a ton in additional interest on your loan.
- Compare refinance rates. Mortgage rates are based on the national prime rate, but they still vary considerably from lender to lender. Some lenders also specialize in working with borrowers with bad credit or other unique situations, so shop around and find the best rates for your needs.
- Apply for the loan. Most lenders don’t charge an application fee unless you finalize the loan, so it doesn’t cost anything to apply in many cases. A completed application will also give you the most realistic sense of your expected loan terms and monthly payments after refinancing, so take the time to complete the application process. For the best comparison, you may even want to apply to your top two or three lenders.
- Negotiate fees. Although most mortgage lenders don’t like to advertise that their fees are negotiable, in most cases, they absolutely will adjust their fees to secure the loan. If you have two or three loan offers, you can use those offers to negotiate the lowest fees with your top choice.
- Run the numbers. Your lender will provide you information on your loan estimate and terms, including your expected monthly payment and interest rate. What the loan estimate won’t tell you is whether the loan makes good financial sense for you. Compare the fees, monthly payment, expected payoff date and overall mortgage costs to your existing loan and make sure it makes good financial sense to refinance.
- Lock your loan. None of the numbers are set in stone until you sign the paperwork. Some borrowers prefer to wait and not “lock in” until the mortgage refinance has been completely approved and is ready to close. If mortgage rates drop between the time you apply and the time your underwriting department processes the paperwork, this can work in your favor. But if mortgage rates increase during the processing time, this could cost you money and maybe even jeopardize your mortgage qualification. Most lenders offer you an opportunity to lock in your loan rate on the front end at the current rate, which guarantees your interest rate will not increase as long as the loan closes within a specified time period. As with all aspects of personal finance, consider what makes the most financial sense for your situation and sign the appropriate paperwork with your lender.