There is no set rule for how often you should refinance your mortgage. The decision to refinance should be based on your personal financial goals and circumstances. Here are some factors to consider when deciding whether to refinance your mortgage:
- Interest rates: One of the main reasons to refinance is to take advantage of lower interest rates. If interest rates have dropped since you last refinanced or since you got your original mortgage, it may be worth considering refinancing.
- Length of time in your home: It may not make sense if you plan to move soon. Refinancing can come with closing costs, so you’ll want to ensure you’ll be in the home long enough to recoup those costs through savings on your mortgage payment.
- Change in financial circumstances: If your financial circumstances have changed since you got your mortgage, such as a significant increase in income or a change in your credit, you may qualify for a better interest rate or more favourable loan terms by refinancing.
- Home equity: If you have built up significant equity in your home, you can refinance to a shorter-term loan and pay off your mortgage more quickly or access the equity to purchase an investment property.
In general, it may be worth considering refinancing if you can lower your interest rate by at least 1% and plan to stay in the home for several more years. However, every situation is unique, and it’s essential to consider all the factors involved in your circumstances. It may be helpful to consult with a financial advisor or mortgage professional to help you decide.