• Amortization. In the early years of your mortgage, you pay more interest than principal. As the years go by, more of your payment is applied towards principal and less toward interest. Does going back to the beginning of a mortgage term make sense for you? Run the numbers and see what you’ll save monthly, but also calculate how little the principal will decrease in the early years of a new loan.

  • Closing costs. Based on what you’ll save with the new mortgage, how long will it take you to recoup the closing costs?

  • Points.
    If you paid points for a lower rate on your current mortgage, that money is lost when you refinance.

  • How much longer are you planning to stay in the house? It’s not worth the cost of refinancing if you’ll be selling shortly.

The decision to refinance should be based on more factors than interest rate or monthly payment. Considering this list carefully may save you money in the long-run.