House value: 1.1 million
Loan amount 780k
Current monthly mortgage (6.25% 30 year) include insurance and property tax: $6500 , the loan is 9 months old.
New monthly mortgage (4.875% 15 year) including insurance and property tax : $7900
Gross annual income: 500k, net pay after taxes and full retirement contributions: 20k
Student loans $330k at 6% total, $4k a month starting in 10 months
Does it make sense to go to the 15 year or stick to the 30 year at a potentially lower rate of 5.9 (which really wouldn't be worth it I suppose?)
Refinance costs: $4000
Thank you!
Make sense to go from 30 year 6.25% mortgage to a 15 year 4.875% mortgage
byu/existentialporcupine inpersonalfinance
Posted by existentialporcupine
14 Comments
Man, who’s your lender? I’m seeing 15 year fixed at 5.4. I’m in a very similar boat. Are you buying points?
How many years into the 30 year mortgage?
Worth it if you can afford the new payment, have some savings and are not worried to find a job if you loose yours.
[https://www.vertex42.com/Calculators/home-mortgage-calculator.html](https://www.vertex42.com/Calculators/home-mortgage-calculator.html)
600k saved over the next 30 years which sounds pretty damn good to me, assuming you’ve never got a concern about needing that extra cash per month
Amazing rate if you can handle $7900 monthly
Go for it. I refied last year, after less than a year on my 30 (@7.65) to a 15 (@4.92). Payment went up about $800 from 5k to 5.8k. I’m starting to feel house poor still maxing out my 401k , but the thought of having a paid off house at 44 (or sooner) keeps me motivated. Plus, in month 13, our monthly became more principal than interest.
The only reason to pause is it’s extremely likely the fed will be dropping rates later this year and once you switch to a 15, it takes a lot more of a drop to justify refinancing again.
Still miss my first house at 2.89% 🙁
I recently went from 30 year fixed at 6.75% and now have a 15 year fixed 4.99% through a local credit union. So worth it for us. We can swing the higher payment since we were paying extra on the principal anyway, and this new PITI is only $200 more than we were previously doing. Our refinance was $0 cost, so it was an easier decision for us.
Totally worth it to cut the payoff time in half
If you want to know what this will be like – start paying your 30 year note like a 15 year note today. So pay an extra $1500/month towards the loan (even $8000/month).
That way you can make sure the cash flow works out. That’s probably a 16 year term (or something).
As a loose ballpark, a refinance dropping a percent is worth it, though you moving to a 15 over a 30 is a significant change.
I’d you can afford the payment; I’d full send a refinance.
I had a 15 year. I know the arguments about you-could-invest-that-money-and-make-more but I cannot tell you how good it felt to have that fucker paid off. And in such a short time. I have been mortgage free for many years. Good luck with whatever you decide.
Do the math if you just paid $7900 a month on your current loan. You save $4k on the upfront and can drop back to 6500 if you need to.
What’s the rate from the same lender for a 30 year?
Definitely go for it . It’s a no-brainer at your salary level.