Refinancing can allow you to secure a lower interest rate on your home loan. In most circumstances, refinancing lowers your monthly payments as well as decreasing the amount of interest you repay. This allows you the option to invest the saved money wisely, possibly paying off your mortgage faster. Either way you cut it, refinancing can be a valuable option for many homeowners.
For example, if you bought your home at a 3.5% interest rate on a $300,000 mortgage, you would end up paying the mortgage company not only the $300,000 you borrowed also an additional $184,968 over a 30-year period. If you refinance your home and now have a 2.5% interest rate on a $300,000 mortgage, you will instead pay $126,731 in interest over a 30-year period, saving you $58,237 at the end of your repayment period.