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:
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free 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.
-
Small Businesses Are Racing to Use AI
The Kiplinger Letter Spurred on by competitive pressures, small businesses are racing to adopt AI. A recent snapshot shows the technology’s day-to-day uses.
-
The Me-First Rule of Retirement Spending
Follow the 'Me-First" rule and you won't have to worry about running out of money when the stock market goes south.
-
From Mortgages to Taxes to Estates: How to Prepare for Falling Interest Rates
As speculation grows that the Federal Reserve will soon start lowering interest rates, now is a good time to review your financial plans for housing, estate, taxes, investing and retirement to make the most of potential changes.
-
This Is How Lottery Winners Build Lasting Legacies, From a Financial Professional
Winning a massive lottery jackpot, like the recent $1.4 billion Powerball, requires seeking immediate legal and financial counsel, protecting your identity and winnings and planning your legacy.
-
I'm an Investment Strategist: This Is How the Fed's Next Rate Move Could Impact Your Wallet
Interest rate cuts might be coming, which could affect everything from your credit card debt to your mortgage. It's smart to prepare now — here's how.
-
Beyond Banking: How Credit Unions Serve Their Communities
Credit unions differentiate themselves from traditional banks by operating as member-owned financial cooperatives focused on community support and service rather than shareholder profit.
-
The Risks of Forced DST-to-UPREIT Conversions, From a Real Estate Expert
Some new Delaware statutory trust offerings are forcing investors into 721 UPREIT conversions at the end of the hold period, raising concerns about loss of control, limited liquidity, opaque valuations and unexpected tax liabilities.
-
Want to Advance on the Job? Showing Some Courtesy and Appreciation Could Help
Two business professors share their insights about the impact of digital communication on the social skills of some in Gen Z and the importance of good manners on the job.
-
From Job Loss to Free Agent: A Financial Professional's Transition Playbook (and Pep Talk)
The American workforce is in transition, and if you're among those affected, take heart. You have the skills, experience and smarts that companies need.
-
A Financial Planner's Top Five Items to Prioritize When Your Spouse Is Ill
During tough times, it's easy to overlook important financial details, but you'll be so much better off if you take care of these things right now.