There are three main reasons to refinance your mortgage: To lower your rate, to access the equity in your home, or to consolidate debt.Refinancing lets you apply for a new mortgage rate from scratch. You might consider this if today’s market rates are much lower than the mortgage rate you currently have. Just remember that breaking your mortgage in the middle of your term will result in a prepayment penalty.
rates are typically lower than those on a credit card or personal loan. Because a is a line of credit, you don’t have to take out a lump-sum amount all at once. This offers you more flexibility in terms of how much and at what time you can access the available equity. Depending on your current lender and circumstances, you may be able to add a
to your current mortgage, thereby avoiding refinancing penalties. is a way to access a lower rate with your current lender without having to go through a refinance, but it won’t let you change any of the other conditions of your mortgage or take out additional funds. With a blended mortgage, your lender will combine your existing mortgage rate with a lower rate from a new mortgage. This will result in a ‘blended’ rate that’s somewhere in the middle.
When my mortgage was up for renewal, I asked about refinancing, and they said I could apply for it, but I would get a different and higher interest rate than the one they had already offered me. Might still be worth it for some, though