A 30-year refinance loan has a 30-year term attached to it -- meaning you’ll be expected to pay off your loan over the course of the next 30 years. This is one of the most common refinance terms homeowners opt for, as the longer term typically means lower monthly payments.
Compare the Best Refinance Options
Why Choose a 30-Year Term?
A 30-year term refinance usually involves significantly lower monthly payments than loans with shorter terms. While this of course means you’ll be paying your loan off for a longer period of time, and can mean that you’ll pay more in interest over time, having lower monthly payments can be hugely beneficial and is the goal of refinancing for many homeowners.
Whether having lower monthly payments is right for you depends on your financial situation now and your expectations of your finances in the coming years. Lower monthly payments mean greater financial freedom and security in the moment, as homeowners with a 30-year term can put more money towards other aspects of life each month than those with a 15 or 20-year term. Those with shorter terms, however, will reach the freedom of having no house payments much sooner -- a homeowner with a 15-year term, for example, will finish paying off their home in half the time as someone with a 30-year term.
It’s important to know what your refinancing goals are. Though you’ll be paying your loan off for a longer time, the safety of having more money available on a month-to-month basis is worth it for many homeowners. If lowering your monthly payments is your primary aim with refinancing, a 30-year term refinance just might be the right choice.