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 30 to 20-Year Mortgage Scenario 

Refinance Calculator

Refinance Details

Difference in Monthly Payment: $0.00
Total Interest Saved: $0.00

Original Loan

Monthly Payment $1,234.00
Total Interest Paid: $24,231

Refinanced Loan

Monthly Payment $1,234.00
Total Interest Paid: $24,231

This calculator is being provided for educational purposes only. The provided values for interest rates are examples only and do not reflect Churchill Mortgage Product terms & offers. The results are estimates that do not include expenses like taxes and insurance, and are based on information you provided and may not reflect Churchill Mortgage Product terms. The information cannot be used by Churchill Mortgage to determine a customer's eligibility for a specific product or service. All financial calculators are provided by a third-party and are not controlled by or under the control of Churchill Mortgage. Churchill Mortgage is not responsible for the content, results, or the accuracy of information.

These calculations are hypothetical examples designed to for illustration purposes only. Consult a Home Loan Specialist for more specific information regarding payments, terms, etc.

As a responsible lender, Churchill Mortgage is committed to the principles outlined in federal and state lending laws ensuring all potential borrowers have access to the same information, services, and opportunities throughout the home loan process.

What is a rate and term refinance?

Refinancing is a powerful tool in the world of mortgages that allows homeowners to adjust your loan terms to better fit your financial goals. One common type of refinancing is called a rate and term refinance. This essentially means you are changing the interest rate or the term (length) of your existing mortgage without taking any cash out. The primary goal is to secure a lower interest rate, shorten or extend the loan term, or reduce the amount of interest you'll pay over the life of the loan.

Refinance from 30 to 20 years 

The unique 20-year mortgage offers an excellent refinance opportunity. It provides a balance between the lower monthly payments of a 30-year mortgage and the faster payoff and interest savings of a 15-year mortgage. Opting for a 20-year term can allow you to pay off your mortgage sooner than a 30-year loan, while still keeping monthly payments more manageable than a 15-year loan. This flexibility can make the 20-year mortgage an appealing choice for many homeowners looking to optimize their finances without overextending their budget. Interest rates are often lower for a 20-year mortgage as well.

Refinance from 30 to 15 years

 The switch from a 30-year to a 15-year mortgage. This type of refinance can offer significant benefits. By shortening the loan term to 15 years, homeowners can often secure a lower interest rate. This means you'll pay less in interest over the life of the loan, potentially saving tens of thousands of dollars. Additionally, you'll build equity in your home more quickly, as a larger portion of your monthly payments goes toward the principal balance rather than interest.

However, it's important to note that while the monthly payments might be higher with a 15-year mortgage compared to a 30-year mortgage, the long-term savings and faster equity buildup can make this option highly attractive for those who can manage the higher payments.

Reasons to Refinance

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Lower Your Monthly Mortgage Payment

Interest rates are notorious for fluctuating. So, if rates have gone down due to market conditions since you last purchased or refinanced your home loan, it may make sense to refinance.

Because interest rates are directly tied to home much you pay on your overall mortgage, lower rates typically mean lower monthly payments. Even if the length of your loan stays the same, you can save hundreds to thousands off your total loan payment.

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Adjust the Length of Your Loan

If you’ve ever wanted to cut the length of your mortgage in half to get you on the right track to paying off your home loan as fast as possible, you can do that by refinancing from a 30-year to a 15-year mortgage. Your monthly payments will be higher, but don’t let that scare you! It just means you’re paying more toward your principal each month.

Typically, interest rates are lower on shorter loan terms as well! This is a great option to maximize return on your investment faster and plan for debt-free homeownership.

Remove Mortgage Insurance

Home values have risen dramatically over the past few years. If your original down payment was less than 20%, you’re likely paying mortgage insurance. The good news is, your home likely has enough equity to refinance and remove your monthly mortgage insurance payments. This could save you a lot of money!

A home appraisal will serve as validation of your current home value and if your loan amount is 80% or less of the current appraised value, your mortgage insurance should be dropped.

Switch Your Loan Type

FHA ➡️ Conventional

If your current mortgage is with the FHA (Federal Housing Authority), you’re paying a premium for mortgage insurance in addition to other costs associated with this type of loan.

As home values continue to rise, it may be a good time for you to look at switching from your FHA loan to a conventional loan.

ARM ➡️ Conventional

If you currently have an Adjustable Rate Mortgage (ARM) and you’re looking to switch to a fixed-rate loan before your interest rate goes up, a conventional loan could be a right fit for you.

Monthly payments on an ARM loan change due to adjustments in the interest rates due to the market. The unpredictability of this loan can be unnerving for those who want the comfort of a consistent payment to budget for each month.

Make Upgrades to Your Home

If your current mortgage has a really low interest rate, staying put may be a wise financial decision. But you don’t have to compromise on the quality or future value of your home. With a few upgrades, you can enjoy your current home more and maintain its future marketability down the road.

Here's the top 5 home improvements to help provide the best long-term financial return:

  1. Hardwood Floor Refinish: 147% ROI
  2. New Wood Flooring: 118% ROI
  3. Insulation Upgrade: 100% ROI
  4. New Roofing: 100% ROI
  5. New Garage Door: 100% ROI
Reduce High Interest Debt

If you’re feeling locked in by a low interest rate on your current mortgage, but you’re also carrying higher interest debt balances, your “blended” rate may be much higher than you think.

Blended Rate Table-1

If this is the case, it may be worth looking into your refinancing options to reduce your high-interest debt like credit cards and help with your monthly cash flow to get you back on track with your budget.

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