Sure, interest rates for mortgages in the US remain at historic lows. But should you refinance again?
Although lower interest rates always sound enticing, the expense involved in a mortgage refi may actually not be worth it.
The typical rule of thumb is that if you can reduce your current interest rate by 0.75-1% or higher then it might make sense to consider a refinancing move. First step is to calculate your monthly savings should you do the refinance, for example:
Suppose you have a 30-year fixed rate mortgage loan for $200,000. Currently, you have a 6.5% interest rate (fixed), and your beginning of month payment is $1,257. Now, rates are at 5.5% interest (fixed), this could reduce your monthly payment down to $1,130.This would be a monthly savings of $127, or $1,524 annually.