Mortgage Rate Refinancing Advice

by Happy Homeowner

Regarding Mortgage Rate And Refinancing Advice: Note from Kate: I enjoyed this refinancing advice from a Reader but I need a little clarification with terms. Can anyone help? Read what our refinancing homeowner advises and see if you can help me.


Kate, we locked in a mortgage for a fixed term - not the life of the mortgage. The rate at the time was reasonable compared to prevailing variable rates.

As benchmark interest rates have declined, initially at a medium pace and then rapidly in relation to the global financial crisis, the fixed rate vs variable rate difference has increased.

Instead of negotiating a fixed to variable transfer in the middle of the fixed term (which would have been quite expensive), we've been happy to re-lock at a lower rate owing to the decline in underlying rates and the natural cycle of our fixed term.

All in all, waiting another 3-4 months for this to happen was cheaper than breaking. Then again, having the opportunity to relock at approximately 5% below where our initial locked rate was is certainly a good option - especially given then underlying interest rates are likely to remain so low.

Kate's Mortgage Rate And Refinancing Advice

Dear Happy Homeowner, I read your refinancing advice a couple of times not understanding your terminology until I realized you might own a home in Canada or somewhere else outside the US?

Am I right? Would you or someone else please comment and let me know what "breaking" entails and why it would be more expensive.

I hope you'll come back to my website again in the future. Of course, all of my information is free. So remember to bookmark to your favorites and visit often for up to date tips for buying a house, mortgage news and refinancing advice.

You can also invite friends to comment on this page or create a page of their own like you did.

Best Wishes,




P.S. Go to my Best Mortgage Rate Blog, an entertaining source of mortgage information. Subscribe now to the RSS feed.

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