Savvy homeowners see beyond reducing their monthly payment when rates are as low as they are now. They avoid adding tens of thousands of dollars to their mortgage and instead cut many costly years while keeping their payment roughly the same.
No one knows how long this golden age of low interest rates will last. See what you can earn by refinancing today.
Save a lot of money without adding years
The 15-year loan rates are lower than other terms. Homeowners who enter these rates to swap their long mortgage for a short mortgage can save tens of thousands of dollars in interest!
âIf you have 23 years left on your mortgage, don’t take a new 30-year loan,â advises money guru Howard’s blog. “If you can’t afford a new 15-year loan, it would be much better if you took a 20-year loan.”
Take the opportunity to shorten your term and save BIG on interest.
Let’s say you borrowed $ 300,000 a few years ago, when rates were typically 4.9%. Stay on this road, and in 30 years you will have paid $ 276,472 in interest.
But what if you get one of the lowest rates today, a rate so low that you could own your home in 15 years? The new mortgage pays off the old AND speeds up time. On this new route, you save more $ 137,000 in interest.
Total interest has been halved. That’s the power of a low interest rate and a shorter term. It’s a win-win when you can reduce your multi-year mortgage AND save $ 137,000.