Refinancing with the goal of securing a lower interest rate has the potential to yield substantial long-term savings. While cost reduction is often a primary benefit, it is important to approach refinancing with careful consideration. In certain scenarios, the potential annual savings may be modest when factoring in exit costs, application fees, and taxes. Moreover, the decision to refinance may be less advantageous if the new loan entails Lenders Mortgage Insurance (LMI) or lacks desirable features such as an offset account. However, if the estimated savings exceed $1,000 per year, refinancing may be a viable and prudent choice.
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