Interest rates are low right now, and as a result of this a lot of Americans are refinancing their mortgage loans to capitalize on the potential savings over the long haul.

After all, that’s the whole point of low mortgage rate refinance in the first place — to “swap” your mortgage for one with a lower interest rate, and this save some money.

But not so fast! Sure, you can save money by refinancing to a lower rate … but only if the numbers work out for you. In other words, the money you save through the low mortgage rate refinance process must be greater than what you spend on the refi (closing costs). If your closing costs outweigh your combined savings over the length of the new loan, then it low mortgage rate refinance is NOT a wise financial move.

However, if the money you save over the life of the new mortgage loan far exceeds the money you pay to refinance (closing costs), then a low mortgage rate refinance is probably a smart move.

Here’s an article on our main website that will help:
When to Refinance … And When Not To

At the beginning of this month, for example, the averate interest rate for a 30-year fixed-rate mortgage was around 5.6% … down nearly a point from a year ago. If somebody were paying 7% on their mortgage and refinanced to this lower rate, they could stand to save a lot of money in interest (especially if they were early on in their mortgage and had a lot of payments left).

Should you pursue a low mortgage rate refinance right now? Maybe. Only you can answer that question for yourself. For starters, you might want to use the mortgage refinance calculator on our Resources page. See how much you might save by refinancing to a hypothetically lower rate. Next, get some quotes from lenders to see what kind of rate you might qualify for.

If the numbers work out in your favor, and you stand to save a lot of money, then a low mortgage rate refinance might be just the thing.

Good luck.

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