Photo: Robert Trachtenberg
With interest rates on 15-year fixed-rate mortgages at record lows right now, it's a great time for home buyers and refinancers to consider a shorter-term mortgage. A few tips:

Use an online mortgage calculator ( has a good one) to compare the monthly cost of a 30-year and a 15-year mortgage at their current interest rates—which typically hover at 4 and 3.2 percent, respectively—and see if the latter fits your budget.

Shop for a lower-priced home instead of settling for a 30-year mortgage; a 15-year mortgage will have roughly the same monthly cost if you reduce your price by about a third. This might require house hunting in a different neighborhood, but consider the future—15 fewer years with mortgage debt, and tens to hundreds of thousands of dollars in interest savings.

Make extra payments on your 30-year mortgage if you can't afford a 15-year mortgage; you can still significantly shorten the life of your debt. One additional principal payment per year reduces your mortgage term by four years. Two extra payments can get that debt paid in 23 years; three extra, in 21 years.

Suze Orman's latest book is The Money Class: How to Stand in Your Truth and Create the Future You Deserve (Spiegel & Grau). To ask Suze a question, go to

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