But with the Fed increasing interest rates by 0.5 basis points on May 4, 2022, the biggest hike in two decades, mortgage advisors interviewed bySome banks have already stopped offering fixed home loans and current home loan rates have already increased.Now is the time to consider refinancing your home loan before interest rates increase further.
As every refinancing situation is unique, make use of refinancing tools to help you determine if it is worth it, or engage a mortgage broker to help you.For those new to this, refinancing is switching out your current home loan for another one to enjoy lower mortgage rates. If we continue without refinancing and assuming that the 0.75 per cent increase comes in one go now, here is what things would look like:This shows us that rising mortgage rates could cost us an additional ~$46,500 in interest.
Using our $500,000 home loan example, let's compare the interest paid within a five-year timeframe to determine if it is worth refinancing.