Calculation: Average Mortgage Rate = Sum of Mortgage Rates / Number of Mortgages
What is the Definition & Importance of ´Average Mortgage Rate´:
This KPI helps investors to evaluate if properties require refinancing. Specifically, investors can compare their mortgage rates (by turning it into an average if they have multiple properties) to the current index mortgage rate. Our hotel management company always suggests making this comparison, as it will tell if the property is better off being refinanced.
Why? Refinancing will allow you to save money (i.e. lower interest rates on existing loans, and reduce monthly payments) as well as increase the rate at which you build equity in your property. This is a highly recommended consideration in managing your investment.
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