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## Paying off a 30-year mortgage as if it were 15

**THE SCENARIO**
I've written recently about offers I've gotten to refinance a mortgage to a 15-year term rather than the 30-year term it currently has.
There is another option, however, in case I'm interested in paying down my loan more quickly, but I want the option to 'relax' my payments in case I experience an income interruption, extraordinary expenses, or the like.
Namely, I can get a 30-year loan, and then, if I can afford the 15-year loan's payments, I can pay that 30-year loan with the 15-year loan's payments. Doing that will considerably shorten the time it takes to pay off the loan.
My mortgage, regardless of its length, will be for $300,000. The 15-year loan's interest rate would be 4.375%, and the 30-year loan's interest rate would be 4.625%. Both loans amortize fully.
**The question:** If I were to use the 15-year loan's payment to pay down the 30-year loan, how long would it take me to pay it off?

**THE SOLUTION**
To solve this one, we need to do two things:
**Part 1: The 15-year loan**
N: 180 (15 years is 180 months)
I/YR: 4.375 (The 15 year loan is at 4.375%)
PV: 300,000 (I'm borrowing $300,000)
PMT: (This is what I'm trying to find)
FV: 0 (The loan amortizes fully)
**Part 1: The 30-year loan with large payments**
N: (This is what I'm trying to find)
I/YR: 4.625 (The 30 year loan is at 4.625%)
PV: 300,000 (I'm borrowing $300,000)
PMT: -2,275.86* (I'm using the 15-year loan's payment, which I found in Part 1)
FV: 0 (The loan amortizes fully)
* I made sure to type in exactly 2,275.86 to make sure that any trailing fractions-of-pennies didn't throw off my calculation (it would have shaved about half a month off the result).

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- Figure out the monthly payment amount for the 15 year loan
- Figure out how long it would take to pay off the 30 year loan using that as the payment

When I solve for PMT, I get that my monthly payment will be **$2,275.86** for this loan.

If I use the 15-year loan's payment amount to pay down the 30-year loan, I'll pay off the loan in **184.90 months (15 years, 5 months)**.

What do you think? Would you prefer the 15-year loan (you'd save yourself over $10,000 overall by doing so, by not paying those last five $2.3K payments), or would you prefer the flexibility of taking the 30-year loan and paying it off faster? Or do you have a different approach entirely? Let us know in the comments!