How Soon Should I Refinance?
Other People Are Reading
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As Soon as a Lower Rate Justifies It
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Mortgage rates go up and down over time. If you buy a home at a time when rates are higher, a sudden move could offer you a chance for a lower rate in just a matter of months. If refinancing would greatly lower your total interest expense over the life of your mortgage as well as reduce your monthly payment, it might be worth the costs.
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Not Too Soon to Miss Your Best Opportunity
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Unless you have a quick chance to get an interest rate that is significantly lower than your existing one and you are confident rates won't go much lower, it might be better to wait for a while to refinance. The cost of multiple refinances can make it more difficult for you to realize enough savings on your mortgage to recoup the upfront investment.
Bottom Line
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Every refinance situation is unique. Fortunately, many banks offer convenient online calculators and refinance tools to use in making your decision. Consider how long you plan to live in your home, how much the actual refinance costs would be and what your break even point will be. You should definitely try to refinance when the new rate would result in a sizable reduction in your monthly mortgage payments and long-term interest expense.
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