Refinancing is common for mortgages, student loans, and auto loans. The new loan pays off the old one; the borrower keeps the new payment terms. Closing costs and fees eat into savings, so the break-even period matters.
General rule for mortgages: refinancing usually makes sense when you can drop the rate by 0.5–1 percentage point and expect to stay long enough to recoup closing costs.
Ask Auri — your AI budgeting coach — how this fits your money habits.
Talk to Auri →Frequently asked questions
Should I refinance my mortgage?
Depends on the rate difference, closing costs, and how long you plan to stay. Break-even under 3 years is generally a green light; over 5 years usually isn't worth it.
Can I refinance federal student loans?
Only into private loans — which permanently gives up federal protections like income-driven repayment and PSLF. Weigh the rate savings against those benefits.