You Need to Refinance Your Mortgage Now

The mortgage payment is one of the biggest items in most homeowners’ budgets. A smaller payment means more to spend elsewhere.

Interest rates on home loans are at the lowest level in 60 years. This is an opportunity to save on interest payments and use the saving to finance other goals.

Consider a homeowner who has a mortgage of $250,000 with a current interest rate of 5.5%. The monthly payment would be $1,419 a month. If, however, the loan was refinanced to current levels of 4.2%, the payment would be $1,222 a month. This is a savings of $2,364 a year. That saved money could be used for retirement, for kids’ education, or other budgetary needs.

Mortgage rates are lower now because investors are seemingly worried about the US economy. More people are investing in US Treasuries. Mortgages tend to track the yield of the 10-year Treasury note, which is close to an all-time low.

There are factors to consider when refinancing other than the rates. You should talk to your mortgage banker about the cost of the refinance, which is typically referred to as “closing costs.”

Other considerations are going to a 15-year loan rather than 30-year, which has even lower rates. This could be important if you are over the critical age group of 45 to 50, since having a mortgage in retirement stretches the retirement dollars.

Another option is refinancing your home to a 30-year loan but continuing to make your current payment. The net result is that the loan would be paid off in a shorter time period but with the flexibility of paying less when cash is short.

This may be “the best time ever” to refinance your mortgage. It would be worth your while to consider the benefits now rather than in a month or two

About the author

Michael Chamberlain, CFP®

Hello. My name is Michael Chamberlain CFP®, the principal of Chamberlain Financial Planning and Wealth Management. Our firm is “fee-only” with offices in Sacramento, Campbell and Santa Cruz California. “Serving clients from the mountains to the sea.”

Our mission is to help clients realize their full potential today while planning for an abundant tomorrow through comprehensive financial planning and collaborative decision-making.

As an experienced investment and planning professional, I have had the privilege of being interviewed by and contributing to hundreds of articles in such publications as Money Magazine, Financial Planning Magazine,,, Nerdwallet,, Yahoo Finance and more.

I hope that you spend some time at the FiGuide site and learn more about the financial matters important to you. To learn more about our firm, visit our website or give us a call at 800-347-1340.

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  • Even though I max out my 401K tax deferred contributions, can I still contribute to a regular IRA? I also have a Roth IRA established but have not been contributing to it due to the max out of my 401 K contributions.

    Thanks for any insight.


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