Last November, I explained our mortgage situation and how our rate dropped dramatically at its first scheduled reset. Six months ago, it dropped from 5.25% to 2.875%, and I figured that would be the lowest it would ever go. I’ve been monitoring the 6-month LIBOR rate (the prime rate on which our mortgage is based), and I was just watching it climb up and up.
Well, we got the letter from our mortgage company indicating the new rate, and we were surprised to see the rate went DOWN instead! In November, the LIBOR was .56 (even though it had gotten down into the .3x range), but the locked-in rate for the next 6 months is .53. That means that our rounded-off rate goes down 1/8th to 2.75%.
We’ll only be saving $30/mth extra, which isn’t as big as the $600/mth drop we saw at the last change, but I won’t complain. However, I’m still keeping my eyes on the LIBOR over the next 6 months. Overall, though, it has to go up quite a bit to make the costs of a refinance pay off.