Simple Ways to Save on Your Mortgage in 2021

Here’s a bit of good news to kickoff the new year: refinance rates are at historic lows. That means the potential savings—either on monthly payments or over the life of the loan—are bigger than ever. If you’re looking to stretch your monthly budget, or just reduce your payments, now’s the time to refinance.

Refinancing to a different term could lower your monthly payment, useful if you need to make more room in your budget. If you bought your home three or more years ago and have a rate higher than 4.25%, and you manage to get a lower rate, you could end up saving hundreds each month, or thousands over the life of your loan. Of course, rates change daily, so you should start the process as soon as possible if you want to secure something like the advertised rates lenders are promoting right now.

Calculate your rate

Refinancing isn’t just for those feeling a pinch in their finances. You could refinance to a 15 year term and pay your home off in half the time, and do it all for less than you would have spent on the old loan. Remember that shortening a term usually results in a higher monthly payment, but if the rate is lower, some of that increase could be mitigated. If you don’t plan to move soon and you want to have your house paid off quicker, now’s the time to hit the gas and speed toward that payoff date.

See shorter term rates

Now’s also a good time to look into cash-out refinance loans. That’s when you refinance for more than your current loan and take the difference out in cash. It’s often a lower interest way of borrowing large amounts and can be useful for consolidating and paying off debt, or making home improvements. The best part is you repay that cash you took out simply by paying your mortgage every month. It’s just one payment! With rates falling, a cash-out refinance could be a great way to get money you need at a competitive, affordable rate.

Compare cash-out refi offers

These refinance rates are one of the few silver linings recently. Even if you’ve only been in your home for a few years, it’s worth at least looking into. These rates won’t stay like this forever. See if you can save.

See if you can end the year with a better mortgage than the one you started it with.