We own a condo and owe about $100k on our current 30 year fixed mortgage (5.125% interest rate) and would like to pay off our loan in the next 15 years as we will be nearing retirement. According to Freddie Mac current 15 year fixed rates are around 2.75%. Should we refinance or just pay down our current loan by making extra payments?
Oh absolutely, if you qualify based on income and credit score, you should refi and take advantage of the current low rates. As you note, rates are even lower for 15 year mortgages — and that’s the one you should take. You always have the opportunity to pay it off if you have extra cash, but this will allow you to lower your monthly payment and save more for retirement!