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Is it worth it to refinance a 6.5% home loan to a 5.25? rate?
We should have pulled the trigger last month when we would have lowered our rate by 2 points. Since rates are creeping back up, I'm wondering if it's still worth it to refi a $128,000 loan balance to a rate of 5.25% with 1/8 discount point. We do plan to stay in this house for a while.
3 Answers
- David ZLv 71 decade agoFavorite Answer
depends upon cost to refi. You will save $1,300 over next 12 months. Your break even should be no more than 2 years. so if cost are more than $2,500 I would say no.
- Anonymous1 decade ago
Lets say you stay in the house for 30 years - I am making
an assumption over here. If your loan balance is 128k,
then for a 30 year fixed you will pay $707 for P+I
For 6.5%, you are paying around $809. So you will end up
saving $102 every month. At the end of the year, you will
have saved, $1224. In 10 years, you will save approximately
$12,000 and so on. Is it worth it to you?
- 1 decade ago
Part of it depends on your goal. Is it only to lower monthly payments in order to survive or is it to save money in the long run? It also depends on how long you have had your current loan. This will take you through a few easy steps to see exactly what the difference would be http://www.ehow.com/how_5103219_should-refinance-h...
