Change rate or term
Review whether a different interest rate, loan term or structure could change the monthly payment or long-term cost.
Mortgage refinancing
A refinance should improve more than a headline rate.
Compare the new payment, closing costs, break-even period and total interest before deciding whether refinancing supports your goals.
Common refinance goals
Start with what you want to change.
Use available equity
Explore cash-out refinancing for eligible financial goals while considering the effect on balance, payment and total interest.
Replace an existing loan
Consider moving between adjustable and fixed rates, changing program type or consolidating eligible liens.
Look beyond the rate
Calculate when the new loan may break even.
Closing costs divided by expected monthly savings gives a basic break-even estimate. The complete decision should also consider loan balance, term reset, cash received and how long you expect to keep the property.
Compare scenariosQuestions to review
- What are the total closing costs?
- Will the loan term restart or shorten?
- How long do you expect to keep the home?
- Will mortgage insurance change?
- Does cash-out increase the long-term cost?
Important consideration
Lower payment does not always mean lower cost.
Extending the repayment term may reduce the monthly payment while increasing total interest. HMCO helps borrowers compare payment relief with the lifetime cost and expected ownership horizon.