USAA Bank mortgage Refinance

Brexit, the recent vote by Britain to leave the European Union, has roiled markets worldwide. One surprising benefit, at least for U.S. homeowners, has been that rates for 10-year Treasury bonds have dropped to near-historic lows.

The resulting low mortgage interest rates are prompting some homeowners to wonder if this is the right time to consider refinancing their home.

“Investors around the world are looking for a safe place to put their money, and many are turning to 10-year Treasuries, ” says Mark Burrage, USAA director of product management. “Since 30-year mortgage rates are closely correlated to these bonds, those mortgage rates have dropped too.”

So, should you refinance?

The traditional rule of thumb was that if you could get a rate 1% lower than your current rate, it may be a good idea.

With rates on 30-year fixed mortgages at 3.35%, this would mean that anyone paying 4.35% or more would benefit from refinancing.

But Burrage says there’s more to consider.

“You’ve got to look at your overall financial situation, ” he said. “The math changes depending on how long you’ve had the loan, how long you plan to keep the new loan and the cost to refinance.”

Even if you can lower your monthly payment, there may be fees when refinancing.

Closing costs, for example, average about $4, 000 per transaction. You need to be sure you’re going to remain in the house long enough to recoup that amount in mortgage savings.

“Refinancing is about a lot more than simply getting a lower rate, ” Burrage says.

Other refinancing goals may include paying off the mortgage sooner and paying less interest overall.

USAA has trained loan officers ready to walk you through the process and make sure you get the best deal to suit your needs.