Rule of thumb when should i refinance my mortgage

The year fixed fell to its lowest level since Freddie Mac began tracking rates in The Federal Reserve cut short-term interest rates to cushion the economic blow from the outbreak. Then, beginning March 9, came the oil-price war between Russia and Saudi Arabia, and mortgage rates continued falling.

According to NerdWallet's daily mortgage rate survey of large lenders, the average rate on the year fixed-rate mortgage fell from 3. That represents a decline of more than three-quarters of a percentage point since May — meaning there are refinance candidates who bought their homes or refinanced their loans just 10 months ago. Assuming that you refinance into another year loan, instead of a shorter term. To find out how much you could save:.

Finally, calculate your potential savings using NerdWallet's refinance calculator. You can refinance to the same payoff date as your current loan, which can be useful when you want to pay off the mortgage before retirement or the kids go off to college. For example, if your year mortgage is exactly 5 years old when you refinance, you can request to pay off the new loan in 25 years.

Tell the lender to amortize the mortgage for 25 years or whatever number of years you wish. Sounds like it could be worth refinancing …. In fact, even a drop in rate of just 0.

The game changes in a hurry. That is likely why this old refinance rule exists. Tip: Pay close attention to the closing costs associated with the loan. Some borrowers may need to stay in their home for five years to save money, while others may only need to stick around for just over a year. But plans change, and you may find yourself living in your home much longer or shorter than anticipated.

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