So you probably think by lower your interest rate 1% it won’t make any difference right? Think again…
Look at the numbers:
$300,000 loan | 30 years | 5.5% interest rate
Interest Alone: 313,212.12
Jeez, now let’s drop it to 4.5% and see what happens…
Interest Alone: 247,220.13
Payments each month dropped by almost $200, you save almost $66,000 in total payments, and save nearly $66,000 in interest alone! If you were to opt for a 15 year loan, expect an even more dramatic overall savings although your payments will be higher.
So as you can see, just dropping the interest by a measly 1% it can make a huge dent in how much you pay per month, in total, and in interest paid. Imagine if you can drop it by 2 or even 3 percent?!
We used a free online calculator from the link on this refinance mortgage post, go ahead and input your own data and see if a refi is in your future. Does not hurt to compare rates with a few lenders and see if the possibilities are there for you.