How to evaluate whether to refinance your mortgage?

Divide total closing costs by your monthly savings to find how many months it takes to recoup the refinance cost. If closing costs are $4,000 and you save $200/month, the break-even point is 20 months. Only refinance if you plan to stay in the home well beyond that point.

Get Loan Estimates from at least 3-5 lenders within a 14-day window. Federal law requires lenders to provide a standardized Loan Estimate form, making it easy to compare rates, closing costs, and monthly payments side by side. Rate shopping within 14 days counts as a single credit inquiry.

Some lenders offer refinancing with no upfront closing costs in exchange for a slightly higher interest rate. This eliminates the break-even calculation risk — you start saving from month one, even if the savings per month are smaller.

A mortgage broker works with multiple lenders and shops rates on your behalf. They handle the comparison process and can access wholesale rates that are not available directly to consumers. Brokers are paid by the lender at closing, so there is often no direct cost to you.

If you can afford higher monthly payments, refinancing from a 30-year to a 15-year mortgage dramatically reduces total interest paid. For example, refinancing a $300,000 mortgage from 7% (30-year) to 5.5% (15-year) can save over $200,000 in total interest.