Published: 2026-08-15
This article provides general information for reference purposes only and does not constitute professional legal, tax, medical, or financial advice. Rules and programs may change. Always verify current details with official sources or consult a qualified professional.
What is refinancing?
Refinancing is replacing your current mortgage with a new one, usually to get a lower interest rate, change the loan term, or access home equity. It can lower your monthly payment or help you pay off your home faster.
When does refinancing make sense?
Refinancing makes sense when you can lower your interest rate by at least 0.5% to 1%, plan to stay in your home long enough to recoup closing costs, or want to switch from an adjustable to a fixed rate. Consider the break-even point.
What are the costs of refinancing?
Refinancing involves closing costs, typically 2% to 5% of the loan amount. These include appraisal, title, and origination fees. Calculate the break-even point to determine if the savings over time justify the upfront costs.