Current 15-year refinance rates — and lenders that offer them (2024)

The average fixed 15-year refinance rate was 5.89% in early January, remaining below the 7% mark reached in November 2023.

If you want to lower your mortgage rate, change loan terms or tap into home equity, you may be considering a 15-year refinance. But like most homeowners contemplating such a move, you might question if this is a good time to refinance.

Refinancing to a 15-year mortgage from a longer term can reduce your total loan cost, build home equity faster and pay off your loan quicker. However, with higher monthly payments than longer terms, it may not be the right move for your budget. Consider the pros and cons of a 15-year refinance and its short- and long-term impact on your finances to determine whether it’s a good choice.

Current 15-year refinance rates

As of Jan. 4, 2024, the average fixed 15-year refinance rate had stayed below 6% for the third straight week, far below its early November high of 7.03%. A year prior, 15-year refinance rates hovered at 5.73%.

Mortgage rates fluctuate daily due to multiple factors. Economic influences such as the federal funds rate (the interest rate at which banks lend to each other), inflation and activity in the bond market all play a role in the trend line. Besides economic factors, personal circ*mstances such as your creditworthiness, income, debt and home equity also impact your interest rate.

Example: If you refinanced a $200,000 mortgage balance at 6.44% with a 15-year fixed-rate refinance loan, you would pay $1,736 monthly in principal and interest. A mortgage calculator can help you compare monthly payments on various loan terms.

Rates and trends in different states

Your home’s location is another factor that influences your potential 15-year refinance rate, as lenders establish APRs partially based on state foreclosure statistics, state laws and other location-specific data. These factors can cause mortgage rates in some states, and in turn, home affordability, to be higher or lower than the national average.

ICE Mortgage Technology employed mortgage payment-to-income ratios to determine affordability by state in its November 2020 report:

Tip: The Consumer Financial Protection Bureau’s interest rate tool can give you an idea of current 15-year refinance rates in your state.

Lenders that offer 15-year mortgage refinance rates

Many of these financial institutions were featured in our list of the best mortgage refinancing lenders.

6 steps to refinance your mortgage to a 15-year term

1. Identify the purpose of refinancing. Be clear about what you want to achieve. Is your goal to lower your interest rate? Pay off the home faster? Access equity? Knowing your refinance goals will ensure you’re making the right choice.

2. Confirm that a 15-year term is right for you. See if it fits your financial goals and budget by running your numbers through a mortgage refinance calculator.

3. Check your credit. This is always a good idea before applying for a loan. Order your credit reports for free at AnnualCreditReport.com and monitor your scores via your financial institution, credit card issuer, the credit bureaus or third-party services.

As you proceed through the refinance process, maintain or improve your credit by keeping an on-time payment history, reducing other debts and avoiding new credit.

4. Compare refinance loans. Rates and fees vary by lender, so shop around to get the most competitive mortgage terms. Request at least three quotes, ideally on the same day, from different types of lenders (traditional banks, credit unions and online companies).

Review the APRs and any excluded fees to make apples-to-apples comparisons. Additionally, consider negotiating fees and rates, as some lenders may match quotes.

5. Choose a lender and submit your paperwork. Expect to provide much of the same documentation you supplied when you got your current mortgage: recent pay stubs, federal tax returns, W-2 forms, bank statements and other financial documents. If your lender provides the option, consider locking in the loan rate to prevent any increases before closing.

6. Close on the loan. After applying, your loan will enter the underwriting process. Your lender will order a home appraisal or other valuation and confirm your financial information. You’ll receive a closing disclosure with the final mortgage details and closing costs before the closing date.

If you’re doing a cash-out refinance, you’ll receive the funds on closing day. Expect the refinance process to take between 30 and 60 days, although some loans offer a streamlined option that reduces the time.

Pros and cons of a 15-year refinance

“If a borrower is comfortable with the higher payment amount, a 15-year mortgage can save a borrower a significant amount of interest over the life of a loan,” said National Association of Mortgage Brokers president Valerie Saunders. That savings, which can amount to hundreds of thousands of dollars, will free up money for other financial goals. Moving to a 15-year loan could also reduce your interest rate, depending on your current terms.

While a shorter term will help you realize the dream of owning your home free and clear in half the time as a 30-year mortgage, the higher monthly payments leave less wiggle room for achieving competing financial goals, such as saving for retirement or funding college. The hefty monthly dues also mean stricter loan requirements.

When to consider a 15-year refinance

While mortgage interest rates have fluctuated in recent months, current 15-year refinance rates remain near the 6% mark, and most homeowners have rates below that — 92%, according to a June 2023 report by Redfin.

If the primary reason for refinancing is to lower your interest rate, that goal may be challenging in today’s market unless you recently secured your mortgage at a higher rate.

Of course, some scenarios (besides reducing your rate) warrant a refinance. And in other cases, it may be best to hold off.

Tip: If you’re on the fence, consider sticking with your longer repayment term but making payments that would end your debt in 15 years. That would let you keep your current mortgage terms and maintain flexibility. An extra payment calculator (like Freddie Mac’s) will show how additional payments can impact your mortgage. Alternatively, making bi-weekly payments would also zero your mortgage balance early.