Refinancing your mortgage can give you the option to pay off your home sooner. If you’re looking to cut the amount of credit has improved or rates are lower since you financed your home, refinancing your mortgage could be a smart financial decision.
Since you’re paying off your loan in half the time, the monthly payments are higher on a 15-year mortgage but rates are lower than a 30-year mortgage. By paying off your loan in half the usual time, you’ll save more than a decade’s worth of interest payments.
Shorter loan, less interest
It’s simple math. By paying off your loan in half the usual time, you’ll save more than a decade’s worth of interest payments. In the first 15 years of a 30-year fixed-rate mortgage, for example, around two-thirds of your monthly payment gets eaten up by interest, and whatever’s left over gets applied to the principal. With a 15-year mortgage, it’s the opposite. Two-thirds of your payment goes toward paying down your balance, while only a third goes to interest.Keep Reading
Thinking about homeownership? Read our best of 2016 mortgage tips.
As the housing market continues to rebound, it’s an exciting time to buy a home. Learn our top tips and best practices for navigating the mortgage and home ownership process.
Transform your yard into an outdoor oasis
Your dreams of sipping frozen drinks at a beach resort or luxuriating on
*No lender fees on 15-year conventional mortgages with an APR (annual percentage rate) of 2.00%. Credit score of 680 or higher required. Qualifying rate is current as of 7/1/2021 and subject to change at any time. Payment example, a loan for $200,000 at 2.00% APR for 180 months, borrower would make 180 payments of $1,287.00. Promotion may end at any time without notice. Contact OCCU for details.