Mortgage refinancing questions homeowners should be thinking about now

By contemplating the answers to certain questions, homeowners looking to refinance can better determine if it's worth taking action now. Wipada Wipawin/Getty Images

Mortgage interest rates fell to an 11-month low last week, giving both homebuyers and current homeowners looking to refinance reason for optimism. It wasn't that long ago that rates here were at their highest point in decades. But rates have steadily declined for much of 2025 and are likely to fall further this autumn, potentially even heading back below 6%, should certain market conditions be met.

All of these developments and the potential for more, however, are enough to make even savvy homeowners confused. And, if you're one of those buyers who purchased a home in recent years, you may be wondering about the value of refinancing your loan now. With rates near 8% in 2023, for example, there could be a justification for taking action quickly. 

To better understand the value of doing so, however, it helps to start thinking through some important and timely mortgage refinancing questions. Below, we'll examine the answers to four specific ones that can better help you inform your next move (or lack thereof).

Begin by seeing how low your current mortgage refinance rate offers are here.

Mortgage refinancing questions homeowners should be thinking about now

Here are four important questions homeowners should be contemplating the answers to now, before applying for a refinance loan:

Are rates already low enough to justify action?

Mortgage interest rates are in the low 6% range now for qualified homeowners. And while that may not seem great, especially compared to what they were at the start of the decade, when they hovered close to 2%, they're still markedly lower than the high 7% to 8% range from 2023. 

So, if you had secured a rate at or around that range, refinancing now could put a significant amount of money back into your pocket each month. The conventional wisdom is that if you can lower your mortgage rate by one full percentage point, then it's worth securing. And, if you can get it even lower, as many can right now, then it becomes an even easier decision.

Compare current refi offers here and learn how much you could be saving.

Will waiting be cost-effective?

It can be tempting to wait for an even lower mortgage rate to surface, even if you already meet the conventional threshold justifying a refinance. And that could very well happen, depending on what the Federal Reserve does with rates next week. But waiting could also be risky, as rates are unpredictable and subject to rise as easily as they can fall. You'll also need to do the math to see how much you'd save even if rates did fall, for example, by another 25 basis points. It may not be a risk worth taking, especially if you can already realize significant savings by taking action now.

What are the closing costs?

Mortgage refinancing isn't free. It will typically cost from 2% to 6% of the total loan amount, depending on the lender, the mortgage balance and other factors. Homeowners will often have the option of rolling that expense into their new loan or paying it up front. Either way, you'll need to make sure that the cost is outweighed by the savings in as short a time window as possible. 

And that could be hard to determine right now, with short-term predictions over rates here varied. It is possible that by the time you break even on your closing costs, or perhaps even before then, rates will be low enough to justify another refinancing, essentially keeping you stuck in a refi cycle with diminishing financial benefits.

What are my long-term plans for the home?

This is a question that's always worth considering before jumping into the mortgage refinancing process, even now. What are your long-term plans for the home? If you're planning to move before you can break even on the closing costs or around that point, then adding to your loan or paying upfront right now won't make sense. If you're in your forever home, however, and are just looking to reduce costs where you can, then this September could be your time to make a move. Just be realistic about your long-term plans and the potential, however faint it may seem now, for selling the home in the future.

The bottom line

Mortgage refinancing can be both stressful and rewarding, depending on when it's done and the environment in which it's done. For many homeowners, rates are already low enough to support starting the process now, while others may be better served by delaying action, perhaps indefinitely, if they're unsure of their long-term plans for the home. By considering these questions and your own personal answers, you can better reach a determination and, potentially, start putting more of your money into the bank and less toward a pricey mortgage rate.