 TITLE: How to Decide Whether a Mortgage Refinance Is a Good Idea CONTENT: Is Now the Best Time to Get a New Interest Rate?\n------------------------------------------------\nMany people are attracted to refinancing because of the potential savings that come with a lower interest rate. But for those savings to actually occur, the interest rate on your new loan will have to be lower than the rate on your existing mortgage by enough to at least offset refinancing fees.\nMortgage rates are set by lenders, but they can be affected when the Federal Reserve changes its benchmark interest rate. When the Fed lowers rates, mortgage lenders may in turn lower their rate. Similarly, when the Fed increases rates, mortgage rates can go up.\nThough changes to the Fed rate have stimulated mortgage rate fluctuations in the past, it's not guaranteed that one will lead to the next. Ultimately, it's possible the new rates lenders begin to offer will be lower than the one you have on your current loan. When you see that lenders are offering lower rates—whether because of a Fed rate change or something else—that could indicate that refinancing could be a good move.\nTo see if lenders are currently offering low interest rates, you can do research online or contact a mortgage broker. You can also call your bank to see if they can give you an idea of what interest rates they are offering for refinancing loans.\nTo illustrate the potential savings you might see by refinancing, let's imagine you refinance your 30-year mortgage after 15 years of repayment and an outstanding balance of $100,000. Your previous loan had an APR of 4%, and by refinancing you're able to drop your APR to 3.5%.\nIf you continued to pay for the next 15 years at 4% APR, you would end up paying roughly $33,000 in interest over that time. By lowering your APR to 3.5%, the total paid in interest would be around $28,000—a savings of $5,000. Just keep in mind you'll need to take loan fees into account to determine your net savings. END