See how much loan your income supports at your target rate, then decide if refinancing is worth it.
When refinancing makes sense
Refinancing typically pays off when the new rate is low enough to offset closing costs within a reasonable window — often called the break-even point. A rate-and-term refinance swaps your current loan for a new one, usually at a lower rate or shorter term, to cut interest paid over time. A cash-out refinance replaces your mortgage with a larger loan and gives you the difference in cash, often used for debt consolidation or home improvements. Which route makes sense depends on your goals, the size of the rate gap, and how long you plan to stay in the home.
Costs to factor in
Refinancing isn’t free. Expect closing costs of roughly 2–5% of the loan amount, covering the appraisal, title search, origination fees, and lender charges. Some lenders offer a “no-cost” refinance that rolls these fees into the loan balance or a slightly higher rate instead of charging upfront — worth comparing either way. If you won’t stay in the home long enough to recoup these costs through lower payments, refinancing may not be worth it yet.
Talk to an advisor
Ready to see if refinancing works for you? Schedule a consultation or explore how we help with interest rate reduction and equity tapping. You can also check the Home Affordability Calculator if you’re weighing a move instead.