How it works
A shorter loan usually means a higher payment, because you repay the same balance over fewer years. But if today's rates are meaningfully lower than your current rate, the lower rate can offset that. A 20- or 15-year loan may cost about what you pay now, and you'd own your home outright years sooner.
It also helps that you've already paid down some of your balance, so you're refinancing a smaller amount than you first borrowed.
Run the numbers
Start with your current principal and interest payment, your balance and the years left on your loan. Then compare payments on shorter terms at today's rates. Our refinance calculator shows payments by term, asks for no contact details and doesn't touch your credit.
CapCenter offers fixed-rate loans in 30, 25, 20, 15 and 10-year terms, so you have several options to compare.
A worked example
Hypothetical example. APR may differ; example only. Rates change daily.
- Today: $280,000 balance at 7.25% with 26 years left, about $1,997 a month in principal and interest
- New 20-year loan at 6.25%: about $2,047 a month, roughly $50 more
- Result: paid off 6 years sooner, with a much lower total interest cost
- Taxes and insurance aren't included in these payments
Example details: $280,000 26-year fixed at 7.250% (7.283% APR): 312 monthly payments of $1,996.52; $280,000 20-year fixed at 6.250% (6.283% APR): 240 monthly payments of $2,046.60. 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.
What to weigh
A shorter term builds equity faster and cuts total interest. But it also locks in a higher required payment than a longer term would at the same rate. If your income varies or your emergency savings are thin, a longer term with optional extra payments gives you more flexibility.
Many common home loans don't have a prepayment penalty, so extra payments are another way to pay off sooner. Check your loan documents to confirm.
With ZERO Closing Costs
Closing costs can eat into the benefit of a refinance. With CapCenter's ZERO Closing Costs, CapCenter pays for or waives the closing costs typically required to process the loan (restrictions apply), so more of the benefit goes toward a shorter loan. You still fund prepaid interest and escrow deposits, which aren't lender fees.
When it may not fit
If today's rates aren't much lower than yours, a shorter term will likely raise your payment noticeably. If you plan to move soon, the long-term savings matter less. In those cases, keeping your loan and adding extra principal when you can may work better.
