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Is now a good time to refinance my home?

Is now a good time to refinance my home?

With most mortgage rates at historic lows, you may be wondering if this is the right time to refinance your mortgage. Reducing your interest rate not only helps you save money, but it also increases the rate at which you build equity in your home, and it can decrease the size of your monthly payment. Refinancing can provide many money saving benefits, but there are also additional costs to consider.

Benefits of refinancing your home

  • Lower your monthly payment – A lower interest rate can mean lower monthly payments, putting more room in your monthly budget.
  • Pay off your home sooner – You may be able to reduce the term of you loan, without increasing your monthly payment by very much. Paying your mortgage off sooner can greatly reduce the amount of interest you pay over the life of the loan.
  • Fix an Adjustable Rate Mortgage – If you are currently in an Adjustable Rate Mortgage (ARM) you might want to refinance into a fixed rate while rates are at historic lows.
  • Use your equity to finance a large purchase – If you have built some equity in your home, you may be able to do a “cash-out refi” by borrowing more than you currently owe and keeping the difference in cash.
  • Take advantage of improved credit – If your credit score has seen a substantial increase since you signed your mortgage, you may now qualify for a lower rate.

Costs to Consider

Before you make the decision to refinance your mortgage, you need to consider the loan closing costs and how they can impact your potential savings. The rule of thumb used to be that it’s only worth refinancing if you can reduce your interest rate by at least 1%. Today, many borrowers find that even as low as a 0.50% rate reduction can be enough of a reason to refinance.

At Trailhead, closing costs generally lower than you will find elsewhere and include a 0.75% loan origination fee and third-party closing costs including title policy, flood report, tax tracking, and county recording. Please talk a Member Service Officer for specific details related to your home.

You will also want to consider how long you plan to stay in your home and the timeline for the breakeven point of the loan costs versus the savings. Check out our “Should I refinance?” loan calculator to examine your potential savings.

Trailhead has options

Trailhead offers two options for refinancing your home:

If you are interested in other options, we partner with Consolidated Community Credit Union to provide over 100 different loan options suited to your unique needs.

Ready to refinance?

To learn more about which option is best for you, call a Member Service Officer at 503.220.2592. When you are ready to apply, simply apply online.


*Annual percentage rate as of 5/1/2020 and subject to change. All loans subject to credit approval and complete terms of loan disclosures.

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