The basic trade-off
When you refinance, you choose how long the new loan will last. A 30-year term spreads the balance over 360 payments, so each payment is smaller. A 15-year term squeezes it into 180 payments, so each payment is larger, but far less interest builds up along the way.
Shorter terms also tend to come with lower interest rates than 30-year loans, which widens the gap in total cost even further.
A side-by-side example on $300,000
Hypothetical example, principal and interest only. APR may differ; example only. Rates change daily.
- 30-year at 6.75%: about $1,946 a month, and about $400,486 in total interest.
- 15-year at 6%: about $2,532 a month, and about $155,683 in total interest.
- Difference: about $586 more a month for the 15-year, and roughly $244,800 less interest over the life of the loan.
Example details: $300,000 30-year fixed at 6.750% (6.778% APR): 360 monthly payments of $1,945.79; $300,000 15-year fixed at 6.000% (6.039% APR): 180 monthly payments of $2,531.57. Principal and interest only; taxes and insurance not included, so the actual payment will be higher. Unless noted, APR assumes ZERO Closing Costs, no discount points and 15 days of prepaid interest. Hypothetical example prepared November 4, 2026, not a current CapCenter rate offer; subject to credit approval.
Why the 15-year builds equity faster
On a 30-year loan, most of each early payment goes to interest. On a 15-year loan, a much larger share goes to principal from the start. That means your balance falls faster and your equity grows sooner.
More equity can matter later. It gives you more room if you ever want to borrow against your home, and more cushion if home prices dip.
Why the 30-year still makes sense for many people
A lower required payment gives you breathing room. If income changes, a big expense comes up, or you want to keep saving for retirement or college, a smaller payment is easier to hold.
You can also pay a 30-year loan down faster on your own. Extra principal payments shorten the loan and cut interest, but you can stop if money gets tight. Check with your servicer on how to send extra principal.
Middle options
You don't have to pick only 15 or 30 years. CapCenter offers fixed-rate terms of 30, 25, 20, 15 and 10 years. A 20-year loan, for example, often lands between the two in both payment and total interest. A loan consultant can price several terms side by side.
How to choose
- Start with a monthly payment you're comfortable with, including taxes and insurance.
- Keep an emergency fund after the new payment, not just before it.
- Think about how long you plan to stay in the home.
- Consider your other goals, such as retirement savings or paying off higher-rate debt.
- Compare the total interest for each term, not only the rate.
What it costs to switch terms
Closing costs can make a refinance take years to pay off. CapCenter refinances come with ZERO Closing Costs (restrictions apply), so there are no lender closing costs to earn back whichever term you choose. You still pay items such as escrow deposits and prepaid interest; see Offer details.
