Is Refinancing Your Mortgage Worth It?

Refinancing can save you money — or quietly cost you more. The right answer depends on your new rate, the closing costs, and how long you'll keep the home. Here's a simple framework.

The break-even rule

Divide your closing costs by your monthly savings to get the break-even point in months. If you'll stay in the home comfortably past that point, refinancing usually pays off. If you might move or refinance again before then, it probably won't.

Watch the term reset

Refinancing into a fresh 30-year loan lowers your payment but restarts the clock — you may pay more total interest even at a lower rate. Refinancing into a shorter term saves the most interest if you can handle the higher payment.

When refinancing is usually worth it

• Your new rate is meaningfully lower than your current one.
• You'll stay in the home well past the break-even point.
• You're shortening the term to cut total interest.
• You're switching from an adjustable to a fixed rate for stability.

Ready to run the numbers? Try our Refinance Calculator.