However, it is not the right choice. Yes, a 30-year fixed rate may be 3.5%, but if you are not going to live in the home long term, then it may be the wrong choice. It is all in the math.
I am in the process of doing a mortgage for a client that is a college professor that has taken a three year position at the University of Connecticut and once complete, is moving back to Texas. A $400,000 mortgage was needed, so at 3.5%, the payment is $1,796.18. We made the decision to do a 30 year amortization, but only fixed for fixed years.
At 2.75%, the payment is $1,632.96. The monthly savings is $163.22, so the three year savings is $5,875. That is a nearly $6,000 savings for my client.
More Than 95 Percent of Refinancing Borrowers Choose Fixed-Rate Mortgages
