Rates are low and refinancing is a great way to put a few hundred dollars back into your pocket each month. Your home may be your largest monthly expense and it’s a great place to look for savings. Refinancing your home at a lower rate can help you reduce your monthly payment, lock in a fixed rate, or pay your home off sooner.
Many homeowners refinance their mortgage to take advantage of a lower interest rate because of a change in finances, personal life or to save money. Your home is an important asset and you have options when considering a refinance.
Get a lower interest rate
If interest rates have gone down by .50% to 1% percentage points, refinancing could save you money over the life of your loan. You also might qualify for a better rate if you have a strong credit score.
Tap into your home’s equity
If your home is valued higher than your current mortgage balance, you may decide that a cash-out refinance makes sense. You can use the cash to pay for renovations, consolidate debt or cover other big expenses such as college education. Keep in mind you’ll be paying closing costs and fees for your new loan, so weigh your options carefully.
Convert to a fixed rate
If you have an adjustable rate mortgage (ARM), you may want to lock in a fixed rate and have a predictable monthly payment. This is a good option if interest rates are expected to rise or if you're looking for stability for your budget.
Shorten the term of your loan
Refinance for a shorter loan period if you decide to pay off your mortgage sooner than your current terms. For example, if you have a 30-year loan, you may want to refinance to a 15-year loan to save money on interest. This can also help you build your home equity faster.
Crunch the numbers
Use our Mortgage Refinance Break Even Calculator to see if refinancing is a good financial decision. We’re here to help you with refinancing options.
Is now a good time to refinance my mortgage?