- Barbara Singh
Refinancing Your Mortgage To A Lower Interest Rate Can Lead To Big Savings
With most mortgages lasting 25 years, it can be the longest commitment of your life. Luckily, the mortgage terms you begin with do not need to be the same terms you finish with. Refinancing your current mortgage can rewrite your repayments to better suit your needs.
Refinancing can save you money in the long run, but you should be aware of how it works.
What is a mortgage refinance?
If you need to make changes to your mortgage conditions, access the equity in your home, or make changes to your rate or lender in the middle of your term, then you will need to refinance your mortgage.
A mortgage refinance means renegotiating your current mortgage contract. When refinancing, you select new terms for your mortgage contract. You may also choose a new lender. A mortgage refinance can be completed at any stage/time during your current term.
With interest rates being at an all-time low, refinancing today can help you lock in today’s lower rate and ultimately save you money. However, a key point to remember is that there will be a penalty for breaking your current mortgage in the middle of your term, but the savings can offset the penalty amount. Talking to a mortgage agent will help you to understand and clarify the details.
However, refinancing is not free and costs vary depending on the information in your current mortgage agreement. Despite the costs, it might still be beneficial for you to refinance. You might be able to save big on interest, even after prepayment and legal fees. Or, accessing some of your home equity can help you consolidate other debts; a lump sum may help you cover a large purchase or expense.
If you think refinancing your mortgage is something that interests you, it’s worthwhile seeking advice from a mortgage professional, such as a mortgage broker/agent. I can assist you by assessing your unique personal situation and help you understand the best option for you and your needs.