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When does refinancing make sense?

The short answer

Refinancing can make sense when it lowers your costs, removes mortgage insurance, shortens your loan, or lets you use equity for a clear purpose. The key is the break-even point: how long it takes for your savings to cover the cost of refinancing. If you'll move before then, it may not be worth it.

Good reasons to consider it

  • A lower payment that saves real money over time
  • Removing mortgage insurance
  • Moving from an adjustable rate to a fixed rate
  • Shortening your loan term
  • Cash-out for a planned, worthwhile expense

Questions to ask first

  • What are the total closing costs?
  • How many months until I break even?
  • How long do I plan to stay in the home?
  • Am I restarting the clock on my loan term?

Sometimes the answer is “not yet”

If the math doesn't work today, I'll tell you, and we can set a plan to revisit when it does.

The bottom line

A refinance should improve your financial picture, not just your rate on paper.

This is general information, not financial advice or a commitment to lend. All loans are subject to credit approval, and programs vary by lender and eligibility.

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