Mortgage Refinance
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It typically compares your new monthly payment and total interest to your existing loan's remaining payments and interest, then calculates a break-even point: how many months of savings it takes to recoup closing costs on the new loan. If you plan to stay in the home past that break-even point, refinancing usually makes sense.

If you restart a new 30-year term after already paying several years into your current loan, you can end up paying more total interest even at a lower rate, because you're extending the repayment period. Comparing total remaining interest, not just the monthly payment, catches this trap.

Yes — a new loan starts its own amortization schedule from year one, so even though your rate might be lower, the early payments on the new loan will again be interest-heavy. This is a key reason a rate-and-term refinance late in a loan's life needs careful evaluation.

A rate-and-term refinance keeps the loan balance roughly the same while changing the rate or term, while a cash-out refinance increases the loan balance to pull out equity as cash. Cash-out refinancing typically carries a slightly higher rate and directly reduces your home equity.

Refinance closing costs generally run 2% to 5% of the new loan amount, and since they're the numerator in the break-even calculation, higher closing costs push the break-even point further into the future. Some lenders offer no-closing-cost refinances that shift this cost into a slightly higher rate instead.