The mortgage market is constantly changing. If you took out a loan when the interest rate was high, then economic changes are a great time to save by refinancing your loan.
What is mortgage refinancing?
Refinancing is the repayment of an existing loan or mortgage at the expense of funds received from a new loan. This is especially true when new debt can be obtained at a lower interest rate. Thus, the monthly payment and the total overpayment are reduced. The greater the difference between interest rates, the more profitable it is to refinance a loan.
Why do banks offer loan refinancing at lower rates?
- Each bank offers different lending programs with different conditions and different eligibility criteria. Therefore, the interest rate for the same borrower in different banks may vary;
- The changing economic situation leads to changes in the key rate. Following the decrease in the key rate, loans become cheaper, and refinancing becomes relevant.
Therefore, if you have a long-term loan or mortgage, follow the news on the key rate and periodically study the offers of banks in Woburn, MA.
How a mortgage refinance calculator works
The refinancing mortgage calculator shows the benefits of changing the interest rate.
Enter the parameters of your current loan and the new rate at which the refinancing will be made.
The program will calculate:
- Current monthly payment;
- The amount of the overpayment for the remaining period;
- The new size of the monthly payment, as well as the benefit compared to the previous value;
- The amount of the overpayment at the new rate.
All calculated values are for reference only. They will not coincide with the real ones, but they are close to the real ones.
Benefits of mortgage refinancing
In addition to the obvious advantages, such as financial benefits, the following can be noted:
- Ability to repay several loans at once in different banks;
- Ability to change the bank to the one that suits you best.
It is necessary to take into account all the conditions of the new loan, including loan processing fees and penalties for early repayment. Make sure that you are satisfied with all the conditions of the new loan agreement, and only then make a final conclusion about the necessity of mortgage refinancing.