What is the Best Refinance Interest Rate?
Michalis 'BIG Mike' Kotzakolios


Defined Tag: Refinance Interest Rate.

Refinancing can be a good thing for your pocketbook, but only if the gains stand to outweigh the risks. When you factor in the fees and the penalties, you can wind up with a significant amount that refinancing will cost you. Naturally, this means that you must calculate your refinance interest rate so that, even after these external costs, you still come out ahead. So what is a good refinance interest rate? Well, that depends.

The most advantageous refinance interest rate depends on many things, from the size of your loan to begin with, to your particular lender's fees associated with refinancing, to any penalty clauses associated with your loan. If you have a large loan, just 0.5% interest can make a huge difference. Similarly, if your lender has low fees, or low (or non existant!) penalties, a smaller, lower refinance interest rate can still have large advantages.

If there are penalties associated with refinancing, or fees or costs, then the refinance interest rate will have to be much better than it would have to be otherwise. (This doesn't apply, of course, to variable-rate loans you are refinancing to fixed-rate loans at a low interest rate; again, the difference in rates has to make up for any fees, but if the fixed-rate interest is low, then you're almost certain to come out ahead.)

And, for all that, the refinance rate is only one of many, many things to take into account when refinancing a loan. If you are getting a good deal on your refinance interest rate, but the loan you refinance with has long-term costs that outweigh the benefits of the risk, then you end up on the short end of the stick. Careful research is a must when you are thinking about refinancing. But when it all plays together, when interest and costs and penalties and fees all work in harmony, and you come out saving money, that's a very good thing.

BIG Mike is a well known author, developer and Adsense expert as well as the owner of Niche Maniacs - a unique Adsense Marketing System designed to build long-term passive income streams from Adsense, Amazon, YPN, Chitika and other PPC services.