Home equity loan, reviewing the basics
Once you have paid yourself back for that initial outlay, though, the savings are all yours. You could also refinance to a fixed rate mortgage carrying a longer repayment term, which will result in lower monthly payments but greater interest costs over the life of the loan. Or, you can refinance to a mortgage having a short term, which allows you to pay principal down and build equity up much quicker. Your total interest costs will also be lower over the life of the shorter term loan. You can similarly realize monthly savings by refinancing two separate mortgage loans into one single loan (with one interest rate).