Is it too much of a gamble to refinance a 7-year fixed loan at 3.1% interest?

**Trudijane** · 09-08-2011, 11:25 PM

I have refinanced my townhouse 3X so far. My monthly mortgage payments have gone from $737 to $584 and back up to $640. I've lived here 16 years and don't plan on moving. All the above refinances were 30-year fixed mortgages. My current mortgage is a 4.5% interest, balance due $125,000 and pay $640/month Mortgage.

I bank with ING and they have a 7-year fixed mortage at an interest rate of 3%. This would reduce my monthly mortgage by over $100 which is what I want. I'd like to keep my fixed mortgage as low as possible.

What I'm concerned about is what happens after 7 years? I would have to borrow less if I refinanced another deal and I'd like to keep my mortgage $650 and under. Am I taking a big gamble here? or should I just worry about it when the 7 years are up. They told me after 5 years, if the interest rates are good, I can set up another 7 years at the same mortgage. Can you give me feedback?

Thanks.

**Dave Reynolds** · 09-30-2011, 08:17 AM

If your goal is reduce your payment as much as possible in the short-term I would recommend that you refinance into the 3% if your total cost (Refinance fees, etc.) of the mortgage is less than what you are paying now. It is hard to predict what the financial environment will be in 7 years, so the best piece of advice would be to lower your payments with the 3% mortgage and make double payments to help pay down your mortgage faster. If you double up on the payments you are likely to pay down the mortgage in half the time freeing you from the financial burden of having a mortgage on the property.

**mortgages** · 07-17-2012, 01:57 PM

you will not beat that deal if you can get it. but look at conditions as said above can you still put money down early with no penalty to pay of your principal with no penalty?? just paying your monthly payment will take along time to get that balance to 0

**rosemcdaniel** · 07-30-2012, 05:01 PM

The best thing you can do is to pay off the mortgage as early as possible this will help you get free on this deal and take away your worries about this mortgage. Try using a mortgage calculator to easily compute or should I say to have an idea whether it would be better for you to pay it off as soon as possible than paying it monthly which will really take long in a way.