The Westbrook Board of Selectmen (BOS) has approved the refunding of bonds with the aim of saving the town more than $300,000 over the next eight years.

Westbrook’s financial advisor, Mark Chapman of Hilltop Securities, advised the BOS at its April 9 meeting that it was a good time for the town to take advantage of low interest rates in the range of 1.75 percent, although the actual interest rate will not be known until June, at the earliest, according to the town’s Director of Finance, Donna Castracane. The refunding will take place no earlier than September.

The bonds that will be refunded are $10,525,000 in 2010 general obligation refunding bonds and $9,610,000 in 2011 general obligation refunding bonds, both of which were issued to fund school projects and town infrastructure projects. The BOS authorized the refunding of not more than $8,100,000 in total.

Municipalities often rely on bonding to fund large, expensive projects and then repay the principal plus interest over time, not unlike the way in which a homeowner pays off a mortgage. Similar to refinancing a home by obtaining a new mortgage with a lower interest rate, Westbrook plans to issue lower-interest bonds and use the proceeds to pay off $8,100,000 of the principal, interest, and fees on the 2010 and 2011 bonds.

The amount of $8,100,000 was based on Chapman’s advice, according to Castracane.

“It may not be financially feasible to refund all bonds, due to the rate at which money was originally borrowed and if they are eligible to be refunded,” said Castracane via email. Chapman “reviewed all our borrowed money and determined which were eligible and viable for refunding.”