If you bought an investment property a few short years ago, say back in 2011 and haven’t refinanced your current note, you might soon be receiving some solicitations from mortgage companies suggesting a refinance might be a good idea right now. And those companies may just be right. The 30 year fixed rate is at its lowest for all of 2015 and as the stock markets continue to stumble, rates will benefit. In 2011 you might have obtained a 30-year rate at say 5.00% while today you can find another 30-year loan for an investment property closer to 3.75%.

The difference in monthly payments on a $200,000 original note is a respectable $217 per month, certainly a help with monthly cash flow don’t you think? The payment at 5.00% is $1,073 while the monthly payment on a 30-year loan amount of $185,000, the approximate amount the loan has naturally amortized to, at 3.75% is $856 on another 30 year loan. But if you switch from one 30 year note to another 30 year and your loan is five years old, you’ve just added another five years to the life of the loan.

Instead, take a look at a 25-year loan term. The rate would be the same and the monthly payment slightly higher than a 30-year payment but still low enough to make refinancing an attractive option and you haven’t extended the loan term. When you’re considering refinancing your rental properties, take care and select the loan term that doesn’t extend how long the property will be financed. Otherwise, that’s nothing more than needless added time.