Already have a good mortgage rate? Easy wins

Why refinancing may not pay off

Refinancing comes with many of the same costs as your original mortgage. If you'd be trading a low rate for a similar or higher one, the savings may never cover those costs, especially if you might move in a few years.

A new loan can also restart the clock. A fresh 30-year term can lower your monthly payment but raise the total you pay over time. Our refinance calculator shows when closing costs would pay off, so you can check the numbers for yourself.

Remove private mortgage insurance (PMI)

If you put less than 20% down on a conventional loan, you may be paying PMI. You can ask your servicer in writing to cancel it once your balance is scheduled to reach 80% of your home's original value, or sooner if extra payments get you there.

To qualify, you generally need a good payment history, no second mortgage or other junior liens, and possibly proof that your home hasn't lost value. Even if you don't ask, PMI generally has to end automatically when your balance is scheduled to reach 78% of the original value, as long as you're current. FHA and VA loans have different rules.

Recast instead of refinance

If you come into a lump sum, some servicers will recast your loan. You pay down a large chunk of principal, and the servicer recalculates your payment over the remaining term. Your rate and payoff date stay the same, and your monthly payment goes down.

Not every loan or servicer allows it, and there may be a fee, so call your servicer and ask.

Pay a little extra toward principal

Even small extra payments toward principal can shorten your loan and cut the interest you pay. If you do this, tell your servicer the extra amount is for principal, and check your statement to make sure it was applied that way. Our mortgage calculator can help you see how your payment breaks down.

Shop your homeowners insurance

Insurance is part of your monthly payment if you have an escrow account, and it's worth checking every so often. The CFPB suggests getting written quotes from several insurers, comparing both price and coverage, and asking how the premium changes at different deductibles.

Make sure any new policy still meets your mortgage's insurance requirements before you switch. Your state insurance department can tell you which companies sell coverage where you live.

Check your property tax assessment

If your assessed value looks too high, or your property record has a mistake like the wrong square footage, you can usually ask for a review. Many assessors offer an informal review first, then a formal appeal, with strict deadlines.

Your assessment notice or your county or city assessor's website should explain the steps and dates where you live.

Need cash? Borrow without giving up your rate

A cash-out refinance replaces your whole mortgage with a bigger one, so your low rate would be gone. A home equity loan or home equity line of credit (HELOC) is a second loan that sits alongside your first mortgage, so you keep your current rate.

A home equity loan gives you a lump sum, often at a fixed rate. A HELOC works more like a credit card and usually has an adjustable rate. Both use your home as collateral, so borrow only what you can repay.

If you're moving, it may be possible to pass your rate to the buyer. All FHA loans are assumable if the buyer qualifies, and VA loans can be assumed with servicer approval. With a VA loan, your entitlement can stay tied to the loan unless the buyer is an eligible veteran who substitutes theirs.