If you are several years into your mortgage, you can maximize your savings by opting for a shorter term!
Consider a borrower who took out a $300,000 30-year fixed-rate mortgage with a 4.875% rate in 2009. Refinancing into a 30-year fixed-rate mortgage with a 3.5% rate would lower monthly payments by $240 to $1,347, and provide about $29,500 in savings over the life of the loan.
Shift to a 25-year mortgage with the same rate and the payment falls by about $86 less to $1,501 – but the savings over the life of the loan jump to nearly $64,000!
