How to Lower the Interest Rate on Your Mortgage Without Refinancing

Don’t want to extend your loan term & pay more in the long run? You have options.

learning how to save on mortgage interest

It’s no secret that life has become much more expensive in recent years. Prices for everything from gas to groceries to a simple cup of coffee have shot up.

Add to that a high-interest monthly mortgage payment, and your budget can go from comfortable to shoestring real quick. But high mortgage rates don’t just affect your monthly budget. They also have a big impact on your overall financial health.

In today’s article, we’ll explore how your mortgage rate affects your finances and reliable ways to ease the burden of high interest without refinancing.

How a High Mortgage Rate Impacts Your Overall Finances

Aside from the pressure a high mortgage rate can place on your budget, the effect it has on the big picture comes down to one thing:

Interest rate vs interest volume.

While your interest rate represents the loan percentage your lender charged you for borrowing, the interest volume is the total dollar amount of interest you pay over your loan term.

As you can imagine, even a small reduction in your interest rate can significantly impact your interest volume, saving you tens of thousands of dollars or more.

For example, let’s say you took out a 30-year, $300,000 mortgage with a 4.5% interest rate. By the end of the term, your interest volume would be around $247,220. Nearly a quarter million in interest alone, straight into your lender’s pockets.

But if you secured a 4% mortgage rate, your interest volume would drop to $215,609. That’s $31,611 in savings…

And if you’re a new homeowner contending with today’s incredibly high-interest rates, you stand to save even more.

However, refinancing for a lower interest rate simply isn’t the right move for many people. Between closing costs, extended loan terms, and higher interest volume, there are a variety of reasons that keep people from pulling the trigger.

Top Reasons People Don't Want to Refinance

Despite the money they may save on monthly payments, there are a few main factors that discourage many homeowners from refinancing:

  1. Costs More Long Term: Refinancing may lower your monthly payments, but it also extends your loan term, which means you’ll likely pay more interest over time.

  2. Takes Too Long to Break Even: Refinancing includes closing costs and fees, which may take years to recoup through your reduced monthly payments.

  3. Upcoming Major Life Changes: If you’re getting married or relocating in the near future, refinancing may not fit into your life plans.

  4. Low Credit Score: If your credit doesn’t make the cut, you may not qualify for a lower interest rate when refinancing.

How to Lower Interest Rate on Mortgage Without Refinancing

The good news is you have options. The bad news? They’re pretty limited.
If you go to your bank or broker and ask how to reduce your interest rate, they’ll likely provide you with the following options:

  1. Removing PMI at 20% equity: If your down payment was less than 20%, your monthly payment more than likely includes a charge for private mortgage insurance. Typically, your bank or lender automatically removes it once you hit 22% equity, but you can contact them as soon as you reach 20% and ask them to get rid of it, which can reduce your monthly payment.

  2. Mortgage recast: Recasting involves putting a lump sum (usually a minimum of $5,000-$10,000 or more) toward your mortgage to lower your monthly payment. Your term and interest rate will remain the same, and lenders typically charge a fee for recasting, but your new monthly payment may help make some extra room in your budget.

  3. Loan modification: If you’re in dire straits financially, you can always ask for a loan modification, which can lower your principal, extend your term, or reduce your interest rate. But this route requires you to prove to your lender that you’re experiencing financial hardship. This typically involves providing records showing that you won’t be able to afford future payments, or worse, making late payments, which can tank your credit score.

Other than loan modifications, which should only be used as a last resort, the above options don’t affect your interest rate. They simply help you save money on your monthly payment.

If all you need is some financial breathing room, they’re certainly worth looking into. But if that’s the case, recasting may not be a viable option for you. And without a lower interest rate, you’ll still have to fork over tens of thousands of dollars in total interest volume by the end of your loan term.

If you’d rather keep that money in your pocket, there’s a way to strategically reduce your total debt and the amount you pay in interest each month at the same time—without refinancing.

Using debt elimination software, you can forget the long-term financial stress of extending your term, paying more in the long run, and going through the whole mortgage process again.

Avoid Mortgage Refinancing With Debt Elimination Software

Powered by advanced programming and money management strategies, debt elimination software is designed to take the burden of financial management off your shoulders and lift you out of debt.

There are a number of different programs out there, and depending on which one you go with, you could have anything from a cookie-cutter debt reduction app to a full-service system that analyzes every aspect of your finances and guides you step-by-step to debt freedom.

For the best results, the latter is the way to go, and United Financial Freedom’s Money Max Account does just that.

Pay Off Your Mortgage in 10 Years or Less

But how can debt elimination software like this reduce your mortgage interest volume so drastically without changing your rate?

The Money Max Account works like a financial co-pilot, using the unique details of your financial situation to navigate you along the fastest route to debt freedom.

It leverages every penny going in and out of your accounts against your outstanding debts, identifying any idle money and using sophisticated algorithms to direct you on which debts to apply it to for optimal results.

It chooses which debt to focus on based on interest rates, the amount owed, and other factors. And every time you spend or make money, it updates its calculations, providing tailored advice to keep you on the shortest path to getting out of debt.

By helping you pay off your debts as quickly as possible, this system shortens your loan term and, as a result, leaves you with a fraction of the interest volume you would have otherwise had to pay.

But beyond the technical aspects of the program, the key to the whole operation is the fact that you’ll have access to its guidance 24/7, for life, regardless of new mortgages or debts.

Where you would normally fall off tracking your finances or get caught up in other life responsibilities, the Money Max Account will be there to do all the calculations for you and take the guesswork out of the equation.

All you have to do is follow its advice and watch as your mortgage balance drops to zero in record time.

If you want to learn more, fill out the form below to get in touch with one of our debt elimination experts and find out how the Money Max Account can cut your loan term in half.

If you'd like to see some client testimonials, check out our Money Max Account Reviews page.

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