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4 Goals of Home Refinancers

Refinancing your current mortgage to a new loan with a lower interest rate or different terms could save you money. To decide if refinancing your mortgage is right for you, it’s important to consider the terms of your existing loan, new life events or changes in market conditions.

1. Get a Lower Interest Rate

If interest rates have gone down by 1 or 2 percentage points, refinancing your mortgage could save you money over the life of your loan. You also might be able to qualify for a better rate if your credit score has improved.

If you choose to refinance, you'll pay closing costs and fees. But refinancing your mortgage for a lower interest rate is worthwhile if the savings on interest is more than these costs. In some cases, a lower fixed rate can save homeowners hundreds of dollars a month!

2. Tap Into Your Home’s Equity

If your home is valued higher than your current mortgage balance, you may decide that a cash-out refinance makes sense.

Homeowners typically use the cash they take out to pay for renovations, consolidate debt or cover other big expenses. Home improvements could increase the value of your home, and consolidating debt could help you save on interest and simplify your monthly payments. 

Just keep in mind that if you refinance your mortgage, you’ll be paying closing costs and fees for your new loan, so weigh your options carefully. You want to be sure that the potential return on your investment is strong enough to justify going forward. 

3. Convert to a Fixed Rate

If you have an adjustable rate mortgage (ARM), you may want to lock in a fixed rate and enjoy rates that don’t change over time. Converting to a fixed-rate mortgage is a good option if interest rates are expected to rise or if you're looking for stability for your budget.

4. Shorten the Term of Your Loan

If interest rates have gone down and you decide to pay off your mortgage sooner than your current terms, you may want to refinance your mortgage for a shorter loan period. For example, if you have a 30-year loan, you may want to refinance to a 15-year loan to save money on interest. This strategy could increase your monthly payment, but could help you save money on interest over time.

Crunch the Numbers

Use our Mortgage Refinance Break Even Calculator to see if refinancing is a good financial decision.

Try Our Calculator

Why Choose Navy Federal?

Great rates. Experienced guidance. Excellent loan service. When you choose Navy Federal to refinance your mortgage, you have access to exclusive benefits that save time and money.

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