Refinancing makes financial sense when: (1) rate drops by 0.75-1%+, (2) you’ll stay in the home past the break-even point, (3) you can afford or roll in closing costs, and (4) your credit score qualifies you for the new rate. Run this calculator with your numbers first.

Typically 2-5% of the loan balance. On a $300,000 loan: $6,000-$15,000. Some lenders offer ‘no-cost’ refinance — they roll closing costs into the loan balance or cover them with a higher rate. Factor this into the break-even calculation.