Should You Refinance Your Mortgage in 2026?
The 0.75% rule, break-even months, and when refinancing is a trap dressed as a deal.
A refinance only makes sense if the savings beat the closing costs before you sell or refinance again.
The old "1% rule" is dead — modern wisdom says refinance when you can drop your rate by at least 0.75% AND stay in the home past the break-even point.
To find break-even: divide total closing costs by monthly savings. If closing costs are $4,500 and you save $180/month, break-even is 25 months. Stay longer than that, you win. Sell sooner, you lose money.
Other reasons to refinance: switching from ARM to fixed, dropping PMI, or pulling cash out for a renovation. Our Mortgage Refinance Calculator handles all four scenarios.
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