When we try to refinance a mortgage, what we try to achieve is better terms than the original ones that would allow us to save money in the long run.

First, check that the new interest rate that is applied is low enough that the savings will offset the fees that are going to be paid. This can be checked with an amortization table.

Second, try to achieve a shorter term loan. They usually have a lower interest rate (a 15 year mortgage has lower rates than a 30 year one). It would not make sense to refinance for 30 more years when we already have paid 20 years in the original loan. This would make a 50 year mortgage.

Third, make sure the loan is locked at a fixed rate. If the interest rate is particularly low, you may want to keep it like that throughout the life of the loan.

This post is intended to only raise awareness. In order to make actual financial decisions please contact your financial advisor and/or tax advisor prior to making the decision.