How to Turn Your 30 Year Fixed Rate Mortgage Into a 15 Year Fixed Rate Mortgage Without Refinancing

The difference between a 30 year mortgage and a 15 year mortgage is that on a 15 year mortgage you pay more principal every month. So if you are currently on a 30 year mortgage and you are happy with the interest rate then you do not need to refinance to turn your mortgage length into 15 years. You can simply pay more principal. This is how you can figure out what to pay each month.

Things You'll Need

• Money
• Internet

Instructions

1. First you have to make sure that your loan does not have a hard prepayment penalty clause. Having a hard prepayment penalty means that you are not allowed to make extra principal payments without incurring extra costs. You can ask your lender if you can make extra principal payments every month.

2. Go to an online mortgage calculator that calculates amortization tables such as the one at Bankrate.com http://www.bankrate.com/brm/mortgage-calculator.asp

3. Subtract the number of years you have already paid for the loan
   from 15. For example, if you have already paid your mortgage
   for 3 years, then you would want to pay off the loan in 12 years for your total loan length to be 15 years.

4. Find the amount you currently owe from your mortgage statement
   and put it into the mortgage calculator.

5. Input your interest rate and also the number you got in step 4
   into the calculator and show the amortization table.

6. The monthly payment is what you need to pay every month for your loan to be complete in 15 years instead of 30.

Tips & Warnings

• If you've already paid your mortgage for 15 years or more then this is not possible unless you pay everything off immediately

• The new payment may be a lot higher so it may be okay to just pay the low 30 year rate.

• Prepaying principal isn't the right thing for everyone. Some people get better investment returns.

Resources

• Mortgage Calculator