How to Decrease Your Interest Rate on a Fixed Rate Loan

Here’s a good example. If interest rates drop significantly, you may want to investigate refinancing.

According to the US Department of Housing & Urban Development, if you plan to be in your house for at least 18 months and you can get a rate 2% less than your current one, refinancing is smart. Also depending on the value of your home and how much it has appreciated since you first purchased, your refinance options may vary.

Refinancing, however, may involve paying many of the same fees paid at the original closing plus loan origination and application fees. So even though you may be saving on your monthly payment the cost of refinancing is something to consider.