With rates at or near historical lows, many homeowners are wondering if it’s time to refinance their mortgage. Interest rates aren’t the only variable to consider. The biggest question is, Will a refi save you money? Here are some tips that may make it easier for you to decide to refi or not to refi:

How soon will you recoup the expense of a refi? If you currently have a rate of 6.00% on your $250,000 mortgage, and you refinance to a rate of 4.75%, your monthly payment will decrease from $1,499 to $1,304, a savings of $195 a month. If your refinance cost $2,000, it will take 11 months to break even. If you’re planning on staying in your home for at least that long, a refi might be the right decision.*

If a refi will significantly lower your monthly payment, can you opt for a shorter term? Exchanging a 30-year mortgage for a 15-year should save you a whole lot on interest and get you out of debt that much faster.

Do you currently have an Adjustable-Rate Mortgage (ARM) that could soon readjust to a higher rate? Interest rates are almost guaranteed to rise at some point, so you may want to opt for the security of a fixed mortgage, particularly if you plan to stay in your home for the long term.

*Rates and fees above are given for example purposes only and are not necessarily representative of the rates and fees offered by Salal Credit Union. All Salal loans are subject to credit approval.

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