If you locked in your mortgage at 2023-2024's peak rates, 2026 might be the year to refinance. Even with penalties, the savings could be substantial. Here are five compelling reasons to explore refinancing.
Reason #1: Escape Peak-Era Rates
The difference between 2023-2024 peak rates and 2026 rates can be dramatic:
The Break-Even Calculation
Formula: Total costs ÷ Monthly savings = Months to break even
Example:
- Total costs: $12,000
- Monthly savings: $500
- Break-even: 24 months
Rule of thumb: If you'll break even within 24 months and stay in the mortgage at least 2 more years, refinancing usually makes sense.
Explore Your Refinancing Options
Get a free refinance analysis to see your potential savings.
Get StartedFAQ
Q: How soon after getting my mortgage can I refinance?
A: Anytime—but penalties apply. Early in your term, penalties are highest. Calculate whether savings exceed costs.
Q: Do I need an appraisal to refinance?
A: Usually yes, to confirm current home value. Some lenders offer no-cost appraisals for qualifying borrowers.
Q: Will refinancing affect my credit score?
A: The application creates a hard inquiry (minor impact). Otherwise, refinancing doesn't negatively affect credit.
Q: Can I refinance if I'm self-employed?
A: Yes, with proper documentation. See our self-employed mortgage guide.
Q: What if I'm underwater (owe more than home is worth)?
A: Traditional refinancing isn't possible without bringing cash to close the gap. Consider alternative strategies or waiting for appreciation.
What's Next
Not sure if refinancing is right for you? Get a free analysis from our team. We'll calculate your potential savings, estimate costs, and give you a clear recommendation.
Get Your Free Refinance Analysis
Find out how much you could save or access through refinancing. No obligation, no pressure.
