Our experts answer readers' home-buying questions and write unbiased product reviews (here's how we assess mortgages). In some cases, we receive a commission from our partners; however, our opinions are our own.
Refinancing into a 15-year fixed-rate mortgage can help homeowners save on interest and pay off their mortgages faster.
Check out today's 15-year refinance rates to see if one of these loans makes sense for you.
15-year refinance rates
In November, 15-year refinance rates averaged 6.86%. This is nearly flat compared to the month before, just three basis points above October's average. But mortgage rates have dropped across the board in recent weeks.
As inflation continues to slow, mortgage rates should go down in 2024. So if you're thinking about refinancing, you may finally have an opportunity to do so in the second half of next year.
See how today's 15-year refinance rates compare to other types of mortgage refinance loans.
Average 15-year refinance rates vs. 30-year refinance rates
Mortgages with shorter terms come with lower rates, meaning that those who refinance from a 30-year fixed-rate mortgage into a 15-year fixed-rate mortgage may be able to get a lower rate, depending on when they got their original mortgage.
In the first half of 2023, the average 15-year fixed rate was 0.72 percentage points lower than the average 30-year fixed rate, according to Freddie Mac data. This, combined with the shorter term, means that a borrower with a $400,000 mortgage could save more than $300,000 in interest over the life of the loan by opting for the 15-year mortgage.
Mortgage calculator
Use Insider's free mortgage calculator to see how much you could save on interest by choosing a 15-year term for your mortgage refinance.
How to find the best 15-year mortgage refinance rates
One of the most important things a borrower can do to ensure they get the most out of their refinance is to shop around with multiple lenders.
If you like your current mortgage lender, you may decide to get preapproved there first. But don't assume that they'll still have the best mortgage refinance rate — there may be another lender that can offer you a better deal now. Aim to get preapproved with at least two or three different lenders.
15-year mortgage refinance pros and cons
Refinancing into a 15-year fixed-rate mortgage can make sense if you're looking to save on interest, but there are trade-offs.
Pros
- Get a lower interest rate compared to 30-year refinance rates
- Save on interest over the life of the loan
- Build equity faster
- Pay off your mortgage sooner
Cons
- Monthly payments are higher compared to longer terms
- If the monthly payment pushes your debt-to-income ratio too high, you might not qualify to refinance
- Less money each month for other needs, wants, or financial goals
"The benefits are that you will pay off your mortgage sooner," says Jose Hernandez, a real estate agent with Coldwell Banker Realty in Chicago. "However, the drawback is that your monthly payment will be much higher compared to a 30-year mortgage."
Hernandez advises that borrowers should only opt for a 15-year mortgage if they can lower their interest rate by more than two percentage points or if their new mortgage payment will be similar to their current one.
"The key is to have a monthly payment that you will be able to afford every month without struggling," he says.
15-year cash-out refinance
When you refinance your mortgage, you'll need to decide whether you want to do a rate-and-term or cash-out refinance. The difference is that you won't be taking any equity out of your home with a rate-and-term refinance.
A cash-out refinance lets you tap into some of the money you've gained in your home and convert it into cash. You'll get that cash at closing and you can use it for whatever you want, such as a home improvement or to pay off other debts.
If you want to get a 15-year cash-out refinance, you'll need to find a lender that offers these types of mortgages. A 15-year mortgage is a very popular term, so you should be able to find a 15-year cash-out option with most major mortgage lenders.
15-year refinance frequently asked questions
Who has the best 15-year refinance rates?
The lender with the best 15-year refinance rates can vary a lot from one borrower to the next. Mortgage rates differ depending on where you live and your financial profile. This is why comparing offers from multiple lenders is so important.
What is the lowest 15-year refinance rate ever?
Average 15-year mortgage rates hit 2.10% in the last week of July 2021 and remained there through the first week of August 2021, according to Freddie Mac data. This is the lowest 15-year rates have ever been since Freddie Mac started tracking them in 1991.
Can you do a 15-year cash-out refinance?
If you're looking to take cash out of your home and stay in or refinance into a shorter term, a 15-year cash-out refinance could be a great option for you. Just remember that when you refinance into a shorter term, your monthly payment will go up.
What are the pros and cons of refinancing a 15-year mortgage?
The main pro of refinancing into a 15-year mortgage is that the shorter term will allow you to save money on interest because you'll get a lower interest rate and pay less in interest over the life of the loan. But the main con is that you'll have a larger monthly payment than you would with a longer term.