Refinancing can be a good idea, but it's not for everyone. As a general rule, refinancing can be a good idea if your current mortgage interest rate is at least 2% higher than the current market rate. Most people agree that 2 percent is a safe number to use when weighing the costs of refinancing a mortgage against the money saved.
There are also many other things to think about, such as how long you plan to live in the property. Most sources and lenders say that it takes at least three to four years to make up for the costs of refinancing your property with the savings from a lower interest rate.
Refinancing can be a good idea for people who want to take advantage of lower interest rates instead of paying more in interest costs due to a higher rate. The fees for refinancing will decrease over a longer period of time, which is why this is a good idea for people who plan to live in their current home for more than 5 years. Changing to a loan with a shorter term is also a good way to build equity. If you don't want to refinance, you could talk to a lender who might be willing to change the terms of the loan or apply new terms.
