Mortgage Refinancing Rates: Up, Down and All Around

Are mortgage rates on the rise? The Magic Eight Ball says, “It’s decidedly so.” 

After jumping to the highest rate seen in three years last week, mortgage rates have dipped slightly but only temporarily. With high inflation and increased consumer spending, interest rates have already started a slow climb through January and February. Rates are expected to continue to climb in the coming months. 

If you haven’t yet taken advantage of the low interest rates to refinance your mortgage, now is the time. 

The savings in going down 3+ percentage points is well worth the effort. However, there are still big savings in even one percentage point. For example, dropping your rate 1 percent – from 3.75% to 2.75% – could save you $250 per month on a $250,000 loan. That’s nearly a 20% reduction in your monthly mortgage payment. 

Even going down .5% could save you up to $150 a month. Going down a quarter percent (.25%) can even be worth it, if you get a no closing cost loan, want to use your home equity or to move from an adjustable-rate mortgage to a fixed rate mortgage.

One of the biggest drawbacks to refinancing are the closing costs and the time involved. If you are interested in refinancing, look at promotions for no closing costs (like MCU’s current promotion). Be aware that some financial institutions (not Madison Credit Union) will offer you no closing costs but will increase your interest rate. 

Take a look at how much you currently owe on your house, your monthly payments and your current interest rate. Feel free to call us at (608) 266-4750 to discuss your case specifically. We are always here to help. And whether you decide to refinance with Madison Credit Union or not, it’s smart money savings to take advantage of the low interest rates while you can.