The only question that matters: when do you break even?

When the break-even is shorter than the time you'll keep the loan. Divide what the refinance costs by what it saves you each month and you get the number of months to recover the cost. Keep the loan longer than that and you're ahead; sell or refinance again sooner and you've lost money. There's no magic rate drop that makes it worthwhile — the old rule about needing a full point is nonsense, because it ignores both your loan size and how long you're staying.

Total closing costs divided by the monthly saving. If the refinance costs $4,000 and saves $200 a month, you break even in 20 months. What that ignores is that a new 30-year term restarts your amortisation — so a lower payment isn't automatically less total interest. Both numbers matter, and the calculator on this page shows you each.

Often, yes, and it's one of the most overlooked reasons to do it. If you're on FHA, mortgage insurance generally lasts the life of the loan no matter how much equity you build — refinancing into conventional once you're above 20% equity removes it entirely. That saving alone sometimes justifies the move even when the rate barely improves.

You replace your mortgage with a larger one and take the difference in cash. Most programs cap you somewhere around 80% of the home's value, less on investment property. It's usually the cheapest way to access a large sum — but it resets your first mortgage, which is a genuinely bad trade if your current rate is one you'll never see again.

If your existing rate is low, very possibly. A HELOC or second mortgage leaves your first mortgage untouched and only charges you on the equity you draw. Give up a 3% first mortgage to access equity and you're paying for that cash for the next thirty years in a way most cash-out calculators never show you.

Sooner than most people assume. Some programs have a seasoning requirement of six months or so, others less. I've had clients refinance inside a year and come out well ahead — one who assumed it was a long shot after twelve months ended up with several workable options.

Marginally and briefly. There's a hard inquiry and a new account replacing an old one, which can nudge your score down a few points for a few months. If you're mid-way through buying something else, time it carefully. Otherwise it's not a reason to avoid a refinance that makes financial sense.