Save Money on Interest Rates Refinancing at a lower rate will reduce your monthly payments. If you plan to stay in your home for a long period of time, these savings could be substantial. Let us look at a very basic example. Suppose you have a 30-year fixed-rate mortgage for $300,000. You originally financed this loan at 7.5% making your monthly payment $2,098 a month. Take this same loan and assume you can refinance to obtain a new loan with a rate of 5.8%. Your new monthly payment would be $1,760, a savings of $338 a month. Convert an Adjustable-Rate Mortgage (ARM) to a Fixed-Rate Mortgage You may have chosen an ARM for its initial
lower interest rate; but if current interest Cost” refinancing. What this really means is rather than pay the traditional up-front fees, you will instead receive a slightly higher interest rate on your loan or a slightly higher loan balance. You are in effect paying for the refinancing costs overthe life of this loan
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