Why would a bank offer refinancing at a lower interest? Is any money saved at all, or is it just paid on a different timeline?
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You take out another loan to pay off the loan that you originally had.
That other loan will have a time period over which it needs to be paid. If someone is refinancing, almost always they’ll be given a LONG loan to pay back over a long time, but the payments will be less.
They pay less each month (smaller mortgage payment), but they’ll be paying it for longer than the original mortgage would have been in place. So though you might have originally paid it off when you’re 55, now you’re not finished with until you’re 65 or whatever.
You only refinance if you’re struggling to afford it or need the money for something else. The bank will “help” you by letting you take out a loan that will give you more money NOW, and maybe at a lower price, but will cost you far more in the long-run.
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