Mortgage Discussion of the basics
However, because the interest has longer to accrue, the lifetime total of the loan may add up to even more money than the previous loan. A loan calculator can help you work out whether an offered loan really offers you savings. If the total comes out to more than the total of your previous loan, either pay more than the minimum each month to informally shorten the term of the loan, or do not refinance. * Refinance with a fixed rate mortgage, not a variable rate mortgage. Variable rate mortgages generally offer lower monthly payments than fixed rate mortgages, but you are likely to lose the benefits of the low interest rate when the economy booms and Federal interest rates rise again.