We bought our current home in 2009. We financed it with a 30-year note at a very good interest rate for that time: 4.375 percent. We planned to stay in the house paying off that mortgage for the next couple of decades. Over time, we would become able to pay extra toward the mortgage and, we hoped, pay it off by the time Brenden left for college. I didn’t think interest rates could get much lower than that.
I was wrong.
Interest rates for 30-year mortgages are now available under 4 percent. I’ve even seen them under 3.5 percent. And for a 15-year mortgage, some lenders are offering around 3 percent. That’s crazy. Now I’m REALLY sure they can’t get much lower. Really, really sure.
So we’ve started the process to refinance with a 15-year. It feels weird to type that. Refinancing is something moms and dads do. (oh wait!)
With these crazy rates, we can pay off the house at least 15 years earlier and save $50,000-60,000 or more in interest, and our payment will only increase by about $200-250/month. It might not be the sexiest thing to do with surplus cash, but it seems like a smart move to me. If I have a good experience with my lender, I’ll post an update later. We won’t close for several weeks.
If you have a mortgage, you ought to look into refinancing, especially if you bought your house more than three or four years ago. Check out this calculator to see whether or not it would save you money.