The short answer
Refinance when three things are true: your score has improved 60+ points since the original loan, market rates are at least 2 points below your current rate, and you have 24+ months remaining on the term. Outside those conditions, the cost of the refinance (hard pull, new origination, slightly extended term) eats the savings.
When refinancing actually saves money
- You opened a subprime loan at 16% with thin credit. Twelve on-time payments later, your file refinances at 9.99%.
- Bank-of-Canada rate has dropped at least 1 point since you signed.
- You can shorten the term (e.g. 84 → 60 months) at a similar payment because the rate dropped.
When refinancing costs you more
- Loan term has under 18 months left. Closing costs and prepayment penalties exceed the interest savings.
- The refinance extends the term significantly to lower the payment — you pay less monthly but more total.
- Your credit score hasn’t improved. Lenders price refinance off current score, not original.
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NewWheels · Calgary Vehicle Financing
NewWheelsis Calgary's specialist vehicle financing platform. Bad credit, newcomers, work permits, and self-employed buyers approved in 24 hours. Our AMVIC-licensed specialist has helped hundreds of Calgary families get into a vehicle regardless of credit situation.
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