A good rule of thumb is to consider refinancing if you can lower your interest rate by 1% or more on a rate-and-term refinance. This could significantly reduce your monthly payment and total loan interest over time. If you're looking for cash-out refinancing, the decision often depends on whether you need funds for a specific purpose (like home improvements or consolidating higher-interest debt) and if the new rate still makes sense for your situation.

💡 Tip: Our calculator can help estimate your new payment and potential savings. And with LendFriend’s Rate Rebound program, you can refinance with no lender fees if rates fall before 12/31/2026, making it easier to act now and still take advantage of lower rates later.

The break-even point is how long it takes for your savings from a refinance to cover the costs of doing the refinance. For example, if you save $200 a month and your refinance costs $2,400, you break even in 12 months ($2,400 ÷ $200 = 12).

 A great refinance deal typically means breaking even in 12 months or less. That’s when you start pocketing the savings!

A cash-out refinance lets you tap your home equity by replacing your current mortgage with a larger one and taking the difference as cash. Many homeowners use cash-out refinancing for:

• Paying off higher-interest debt

• Funding major home improvements

• Covering education or medical expenses

• Would rather diversify your investment and put the money in the stock market (only recommended if you believe you can make more than the interest rate you are paying on the refinance)

It’s worth considering if you can secure a reasonable interest rate and your monthly budget supports the new payment.

With LendFriend’s Rate Rebound, if you refinance with us and market rates fall before 12/31/2026, you can refinance again with no lender fees. Typical costs like processing, underwriting, appraisal, and even some third-party title fees are waived or credited — saving you thousands.

👉 This gives you peace of mind that you won’t miss out on savings if rates improve later. Learn more about Rate Rebound.

Yes — but there are also ways to mitigate that risk. Some things to consider:

• Extending your loan term might mean paying more interest over time even if your rate is lower. However, you can keep the term of your existing loan so no additional interest is paid. For example if you have 25 years remaining on your existing loan and decide to refinance, you can opt for a 25 year loan term.

• Cash-out refinancing reduces your home equity and could impact your financial flexibility later.

• There are closing costs to factor in (unless waived by programs like Rate Rebound).

That’s why it’s important to use our calculator, review your break-even point, and speak with a trusted mortgage advisor.