When Is The Right Time To Refinance?
| If you’ve been watching mortgage rates wondering if now is the right time to refinance, you might be right. But there isn’t one cookie cutter answer to when the perfect time is to refinance. Instead, it is a very personal, individualized answer that examines your specific circumstances and goals. We call that magic, personal number you strike rate. |
What’s a “Strike Rate” in a Mortgage Refinance?
Think of a strike rate like the “sweet spot” interest rate where refinancing makes financial sense. It’s the threshold where the savings you’d get from a lower monthly payment outweigh the costs of refinancing.
For example:
If refinancing costs $4,000 in fees, and lowering your rate saves you $200/month, it would take 20 months to “break even.”
Your strike rate is the point where those numbers line up and the refinance becomes a smart move — not just a shiny new rate.
Key Things Homeowners Should Examine Before Refinancing
Closing Costs vs. Monthly Savings
How quickly do you recover your upfront costs?
Is your break-even period shorter than how long you expect to stay in the home?
Remaining Loan Term
Refinancing into a new 30-year loan might lower your payment but add years of interest.
Sometimes, a 20-year or 15-year term is the smarter play.
Current and Expected Market Rates
Rates move daily, sometimes hourly. Your strike rate isn’t just a number; it’s about catching the right market conditions.
Your Bigger Financial Picture
Are you planning renovations, kids’ college, or retirement?
Sometimes cash-out refinancing or debt consolidation shifts where that strike rate sits.
How A Mortgage Broker Can Help You Identify & Track Your Strike Rate
Here’s where my role as an experienced mortgage broker comes in:
Personalized Analysis: I calculate your strike rate based on your goals, loan balance, current rate, monthly savings, and break-even point. No cookie-cutter numbers — your strike rate is unique to you.
Market Monitoring: Instead of you watching the news and guessing, I keep an eye on rates and alert you when your strike rate shows up. Think of me as your “rate radar.”
Strategic Guidance: I help weigh options like shortening your term, consolidating debt, or tapping equity — so we’re not just chasing a lower rate, but aligning the refinance with your goals.
Ongoing Updates: Life changes. Markets change. I’ll revisit your strike rate regularly to make sure you’re ready to act when it makes sense.
In short: Your strike rate is your green light. Our job is to make sure you know when it turns on.