When does it make sense to refinance my mortgage?

Refinancing makes sense when you can lower your interest rate enough to recover closing costs (typically 2–5% of the loan balance) before you expect to sell or pay off the mortgage. A simple rule of thumb is the 1% rule: refinancing is worth considering if you can reduce your rate by at least 1 percentage point. A more precise method is the break-even calculation: divide total closing costs by your monthly savings. If you will stay in the home longer than that break-even period (often 18–36 months), refinancing is financially beneficial. Also consider: switching from a 30-year to a 15-year mortgage to save significantly on total interest, or cash-out refinancing if you have substantial equity and a compelling use for the funds. Model your break-even at wealthserene.com/tools/refinance-analyzer.