What is mortgage averaging?

Mortgage averaging refers to the practice of assessing refinancing options by considering various interest rates in order to identify the best financial strategy for a borrower. This involves evaluating current market rates against the borrower's existing mortgage terms to determine if refinancing could lead to lower monthly payments, reduced overall interest costs, or better loan terms.

This process is particularly useful when interest rates fluctuate, allowing borrowers to benefit from lower rates while also taking into account any potential fees or penalties associated with refinancing. By averaging the potential costs and benefits of switching to a new mortgage, borrowers can make more informed decisions about their financial commitments.

The other concepts mentioned, such as combining loans, calculating total debt, or measuring property value, do not capture the essence of mortgage averaging, which focuses specifically on the evaluation of refinancing based on interest rates.