Find out in 30 seconds. Calculate monthly savings, breakeven point, total lifetime savings, and ROI on closing costs. Includes 3 different rate scenarios.
Refinance when you can lower your rate by 0.5-1%+ AND plan to stay in the home 2+ years (to recover closing costs). Lower rate = lower monthly payment + lower total interest. Other reasons to refinance: switch from ARM to fixed, shorten loan term, take cash out for renovations or debt consolidation.
Refinancing typically costs 2-5% of the loan amount. On a $300K loan, that's $6K-15K. Costs include: appraisal ($400-600), title search/insurance ($800-1,500), loan origination fee (0.5-1% of loan), recording fees, and possibly mortgage insurance if putting less than 20% down. Some lenders offer 'no-cost' refinance (rolled into loan at higher rate).