When it comes to whether you should refinance your current mortgage, generally use the “half point rule,” which means the new rate is at least 0.5 point lower than your current one.
However, in reality, it comes down calculating what you’ll be saving every month versus what it’s going to cost you to take out the new loan — and then figure out when you will break even, he explained. If you plan on staying in the house for longer than that time, it could be a good idea to refinance.
Depending on your timetable, you can also look to refinance at a shorter fixed period, such as a 15-year loan or an adjustable-rate loan that has a shorter fixed term before the rate adjusts. Those loans typically have a lower interest rate.