Can Refinancing Save You Money?

Why Refinance?

By Andrew Legge, Invis Inc

If you locked in your mortgage a couple years ago and decided on a 5 year term, the rate at the time was great at 5.10%. Now, most 5 year rates are 4.39%. Can refinancing your home help you save money? In a word: "yes".

For example:

If have 3 years left on your term and had a mortgage worth $100,000 (for ease of calculations) at 5.10% for 5 years with a 25 year amortization. 2 years ago you would be paying $587.31 per month in principal and interest, would have a balance of approximately $95,798.18, and would still owe $13,991.02 in interest over the next 3 years.

Should you decide to refinance today, with your balance of $95,798.18 amortized over 23 years at 4.39%, your monthly principal and interest payment would be $549.81 per month. The interest that you would pay over the next 36 months (the remainder of you old term) would be $12,020.65.
Assuming you have a 3 month interest penalty (check with your current lender to be certain) it would be approximately $1208.65.

Therefore, we can assume you will save the following for every $100,000 currently mortgaged under the term listed above.

• $13,991.02 - $12,020.65 = $1,970.42 interest saved
• $1,970.42 - $1,208.65 = $761.77 net interest savings
• $587.31 - $549.81 = $37.50 per month saved
• $37.50 x 36 months = $1,350 total payments saved
• $761.77 + $1,350 = $2,111.77 saved per $100,000 of mortgage

You may want to think about reinvesting the savings into your mortgage to pay down the principal faster. It's a win, win situation. Your mortgage will be paid off sooner and you will pay less interest overall.

If you would like to take advantage of the refinancing option and save yourself some money or would like to discuss this further, you can reach me at: 604.312.2195 or by email at: andrewlegge@invis.ca

I would be thrilled to do a free personalized analysis of your mortgage.
Sincerely,

Andrew Legge

Andrew Legge, is a personal Mortgage Consultant with Invis Inc. He shares the same philosophy as the Lepore Accolade Real Estate Team, for customer loyalty and integrity and has assisted our clients in achieving their mortgage goals by saving them money. Michael Lepore, would like to thank Andrew for his continued support and assistants in helping the members of the public save and receive the best services for all their Real Estate needs.