Many things need to be considered when debating whether to refinance your mortgage or not.
Refinancing your mortgage can be a shrewd financial move, potentially saving you a lot of money on your monthly mortgage or on the total interest of your home loan. If this matches your financial goals, then it could be an ideal solution.
However, before you apply to refinance, it's important to refinance at the right time.
Here are some reasons that might sway you to commit.
Mortgage rates have dropped
Mortgage rates fluctuate all the time because they are affected by multiple factors including market issues, interest rates, inflation, economy, and global instabilities.
If mortgage rates fall and you can secure a lower interest rate than on your existing loan, then it is possible to save quite a lot of money by refinancing.
If rates drop 1% or 2% below your current rate, then in theory it should be a good time to refinance. However, don't forget to look at your current loan term when refinancing, to make sure it will definitely benefit you. If you're unsure, use our mortgage refinance calculators to help you decide.
Do you want a shorter term on your loan?
If you want to pay off your debt faster, then you may want to consider refinancing your mortgage so that you get a shorter loan term.
If you can combine a lower interest rate with a shorter loan term then you really could make some savings. However, to do this you often have to accept a higher monthly payment, so make sure this is something you can manage.
If you're unsure how this all adds up, use our mortgage refinance calculators to give yourself a more accurate picture.
You want to swap from an adjustable to a fixed rate
If you have an adjustable-rate mortgage (ARM) and mortgage rates are increasing, you may want to consider refinancing so that you can convert to a fixed-rate mortgage. A fixed-rate mortgage will hold your rate at a more reasonable level whereas, with ARM, the rate may increase beyond your means.
Improved credit history
When you first took out your mortgage you may not have had a great credit history and this would have significantly affected your mortgage rate. If your credit rate has improved, use our mortgage refinance calculators to find out how much better off you could be.
Whatever your situation, if you are considering refinancing your mortgage, our mortgage refinance calculators will help you discover what savings you can make and whether it is the right time for you.
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