Q: I currently have 25 years left on a 30-year fixed rate mortgage for my primary residence. My rate is 5.5 percent. With the interest rates dropping, I thought it might be wise to try and land a 20-year mortgage at a lower rate.

The concept is I’d save money and pay off the house 5 years earlier. What would the interest rate have to be for this plan to make sense? I’m guessing $2,000 for closing costs and there will be no problem with the house appraising out in value.

A: I’d love to be able to shave 5 years off of my home loan and pay less in interest along the way, so your plan sounds good to me.

As we went to press, some lenders were quoting in the upper 4 percent range for a 20-year mortgage (they’re priced similarly to 15-year loans). Ideally, you’ll limit your closing costs to an amount you can “pay off” in 6 to 8 months with the savings you’ll glean from your lower interest rate.

But you won’t know what’s out there until you start shopping around. Talk to a bunch of different lenders (big, small, online, mortgage broker) to see what kind of deal you can get.

Jan. 19, 2009.