Is Now the Right Time to Refinance for a Lower Mortgage Rate?
Consider these three things before you make your decision.

The decision to purchase a home is often life changing, making a mortgage a big part of one's financial plan and often the biggest piece of debt. And, similar to the stock market, the economic landscape for lending is continuously changing, making it imperative for consumers to review their mortgage regularly.
With interest rates remaining near historic lows, many are considering refinancing their home to lower monthly expenses, assist with a long-term payoff or consolidate debt—essentially to put themselves in a better financial position. Yet reasons to refinance are not limited to interest rates alone, and the "right" time to do it may vary for each consumer.
To hone in on key refinancing considerations, I chatted with Vince Giacalone, a mortgage banker with Residential Wholesale Mortgage (RWMI). Below is our collective list of motivators and considerations for refinancing:

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
What's Your Timeframe?
Before jumping into refinancing, determine your plan for the home: What is the estimated time you plan on owning the home? Is it two years? Is it 20 years? Determining that timeframe will help dictate the appropriate loan program for you and help you choose either a short-term or long-term hold strategy.
As Giacalone puts it, "friends don't let friends pay points." In other words, paying points to obtain a mortgage only benefits the consumer in specific, long-term scenarios. So, have a good understanding of your timeline before you refinance.
Know Your Motivators
What is your specific reason for refinancing? Is it to obtain the lowest possible rate, to protect the loan over the long haul or to improve your monthly cash flow? Or are you considering home improvements? It's important to determine the motivation prior to making the move. In a low-interest-rate environment, some consumers may see immediate monthly savings and opt to refinance for that reason. Others may use a cash-out refinance to build an addition to the house, consolidate their debt or invest the money elsewhere.
Interest Rates
Interest rates aren't the basis for a refinancing decision, but they can certainly play an important role. With current interest rates near historic lows, consumers may be taking a closer look at their statements and assessing where they stand. "Taking the mortgage temperature can either show consumers they are well positioned or serve as a wakeup call," says Giacalone. As each scenario is specific to the person, the refinancing decision should be made based on all aspects of the interest-rate environment.
Similar to the decision-making process involved in the original purchase, it's important to review one's reasons for refinancing and whether it's the right time. Personal situations vary, so be cognizant of your motivators and goals before refinancing your home.
Taylor Schulte, CFP® is founder and CEO of Define Financial, a San Diego-based fee-only firm. He is passionate about helping clients accumulate wealth and plan for retirement.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Taylor Schulte, CFP®, is founder and CEO of Define Financial, a fee-only wealth management firm in San Diego. In addition, Schulte hosts The Stay Wealthy Retirement Podcast, teaching people how to reduce taxes, invest smarter, and make work optional. He has been recognized as a top 40 Under 40 adviser by InvestmentNews and one of the top 100 most influential advisers by Investopedia.
-
Best Banks for Retirees 2025
National banks offer a wide variety of accounts and services, including wealth and investment management. Here's Kiplinger's pick of the best.
-
Best Banks for High-Net-Worth Clients 2025
National banks offer a wide variety of accounts and services, including wealth and investment management. Here's Kiplinger's pick of the best.
-
Five Ways to Maintain Charitable Giving During Volatile Times: A Giver's Guide
When the economic outlook is uncertain, charitable giving is even more important — and impactful. You can be strategic by using donor-advised funds, diversifying assets and prioritizing unrestricted gifts.
-
I'm a Financial Adviser: This Is How You Can Save for Big Goals Even if You Feel Like You're Barely Getting By
Learning good financial habits — building an emergency fund, paying down debt, saving consistently — gives you flexibility, options and a path to security.
-
Financial Fact vs Fiction: Why Inflation Is Lower, But Prices Are Not
Do you think bonds protect you from stock losses? Are you confident your assets will go to your intended heirs if all you have is a will? Think again — and read on for other myths that could be leading you astray.
-
'Buy Now, Pay Later' for Everyday Spending? This Financial Pro Thinks It's Risky
'Buy Now, Pay Later' apps can get you out of a jam when you need money quickly. But using them regularly for small purchases could create problems.
-
From Dream Apartment to Nightmare: When Your Landlord Evicts You Through No Fault of Your Own
This is what I suggested a tenant do to get out of her lease after her landlord's inexperience and lack of action made her rental situation unsafe. It's a legal situation called 'constructive eviction.'
-
Six Steps to Being Empowered and On Track: An Expert Financial Guide for Women
While most female investors feel on track with their financial goals and empowered by managing their investments, many regret not starting sooner. Here's how you can get started and take control of your financial future.
-
Selling Your Business? This Powerful Insurance Option Unlocks Multigenerational Wealth
Private placement life insurance (PPLI) offers almost unbelievable investment flexibility, estate planning and tax advantages. And it's completely legit.
-
Five Money Moves to Make Before Your First Child Arrives: A Financial Guide
I wish I'd known some of these when I was an expectant parent. These important steps include establishing an emergency fund, budgeting for new expenses, securing life insurance and more.