When Should You Refinance?
Learn if refinancing makes sense for your situation
2026 Average Refinance Rates
6.8%
30-Year Fixed
6.1%
15-Year Fixed
6.4%
5/1 ARM
Types of Refinancing
Rate-and-Term
Lower rate or change loan term
Cash-Out
Tap home equity for cash
Cash-In
Pay down principal at closing
Streamline
Simplified process for FHA/VA
Good Reasons to Refinance
- • Rate is 0.5-1%+ lower than current
- • Plan to stay past break-even point
- • Want to shorten loan term
- • Need to remove PMI
- • Switching from ARM to fixed
Think Twice If...
- • Moving before break-even
- • Rate reduction is minimal
- • Extending term significantly
- • Taking cash out for non-essentials
- • Current loan has prepayment penalty
Refinance Closing Costs
Closing costs typically range from 2-5% of your loan amount. Factor these into your break-even calculation.
2%
Low End
3%
Average
5%
High End
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Based on Freddie Mac and CFPB refinance data 2026