QUESTION: Refinancing: When does it make sense to refinance a mortgage?

The decision to refinance an existing mortgage can be an effective way to significantly reduce the financial burden on your family budget. However, it should be made based on cold calculation, clear figures, and an understanding of current economic conditions, rather than simply under the influence of advertisements for new credit products.

The process should always start with defining a specific goal in terms of numbers and a timeframe. The main criterion for the feasibility of refinancing is the difference between your current interest rate and the new bank's offer. It is generally believed that there is an economic benefit if the new rate is lower by at least 1.5–2 percentage points, provided you are in the first half of the loan repayment term.

The second step is to break the entire process down into clear practical steps and incorporate them into your personal or family budget. You need to calculate not only future savings, but also related reissuing expenses, such as a new property appraisal, insurance, and possible bank fees, to ensure a net positive outcome.

Regularly review your financial plan and keep your finger on the pulse of market changes. The financial market is constantly changing, and rates can both fall and rise, so it is useful to revisit the analysis of your mortgage agreement about once a month or quarter to avoid missing the most favorable moment to submit a refinancing application.

Competent refinancing can save you hundreds of thousands or even millions of rubles in the long run. The main thing is to carefully read the new credit agreement and ensure there are no hidden fees and imposed paid services.