01/21/2026
With interest rates dropping many homeowners are considering refinancing. If you purchased in the era where mortgage rates were around 7%, it’s probably a good time to discuss your options with your lender. Currently we’re looking at interest rates under 6%, some as low as 5.5%. If you have a $250,000 home loan with a 7% interest and a 30 year term, refinancing right now to a 30 year loan at 5.5% interest would save you about $250 a month, give or take. This is great, but when you visit with your lender about this, make sure you talk about closing costs for that refinance loan. Closing costs running around 2% of the loan amount would be equal to right around $5000 on a $250,000 loan. At this rate your $250 monthly savings is going to take you about a year and a half to make up. This may be OK if you plan to stay in the home long-term, but if you’re unsure or if this is potentially a short term home for you, refinancing may not save you money right now. With interest rates dropping it’s definitely a good time to restart the financing conversation with your lender, just be sure to get all of the details to make sure it’s truly a cost-effective decision for you.