How much lower does my rate need to be?

For years the advice was to wait until rates fell a full point below yours. Refinancing often cost thousands of dollars in fees. If a refinance cost $5,000, it could take years of monthly savings just to break even. A full-point drop was the usual way to recover those fees in a reasonable time.

A quarter point on a large balance can save more than half a point on a small one. Look at these together:

• Your closing costs, if any
• Your loan balance, since bigger balances save more per point
• How long you plan to keep the loan
• How many years are left on your current loan
• Whether you're also removing mortgage insurance or leaving an adjustable rate

Hypothetical example. APR may differ; example only. Rates change daily. Monthly principal-and-interest savings on a 30-year fixed loan, starting from 7.25%:

• $200,000, 0.25% lower: about $34 a month
• $200,000, 0.50% lower: about $67 a month
• $300,000, 0.25% lower: about $51 a month
• $300,000, 0.50% lower: about $101 a month
• $300,000, 1.00% lower: about $199 a month
• $500,000, 0.50% lower: about $168 a month
• $500,000, 1.00% lower: about $332 a month

Example details: $200,000 30-year fixed at 7.250% (7.280% APR): 360 monthly payments of $1,364.35; $200,000 30-year fixed at 7.000% (7.029% APR): 360 monthly payments of $1,330.60; $200,000 30-year fixed at 6.750% (6.778% APR): 360 monthly payments of $1,297.20; $300,000 30-year fixed at 7.250% (7.280% APR): 360 monthly payments of $2,046.53; $300,000 30-year fixed at 7.000% (7.029% APR): 360 monthly payments of $1,995.91; $300,000 30-year fixed at 6.750% (6.778% APR): 360 monthly payments of $1,945.79; $300,000 30-year fixed at 6.250% (6.275% APR): 360 monthly payments of $1,847.15; $500,000 30-year fixed at 7.250% (7.280% APR): 360 monthly payments of $3,410.88; $500,000 30-year fixed at 6.750% (6.778% APR): 360 monthly payments of $3,242.99; $500,000 30-year fixed at 6.250% (6.275% APR): 360 monthly payments of $3,078.59. Principal and interest only; taxes and insurance not included, so the actual payment will be higher. Unless noted, APR assumes ZERO Closing Costs, no discount points and 15 days of prepaid interest. Hypothetical example prepared November 4, 2026, not a current CapCenter rate offer; subject to credit approval.

When CapCenter pays or waives the lender and third-party closing costs, there's nothing to earn back. A drop that lowers your payment starts saving from the first month. And because there are no closing costs to recoup, you can refinance again when rates fall. Escrow deposits and prepaid interest aren't covered; see Offer details.

In these cases, compare total interest and your payoff date, not just the monthly payment:

• You'd restart a 30-year term with only 15 or 20 years left, adding total interest
• Your balance is small, so the monthly savings are only a few dollars
• Your credit or equity has changed, so the rate you'd get is higher than the published rate
• You'd need mortgage insurance because you now have less than 20% equity

If you have 25 years left, refinancing into a 25-year term keeps your original finish line. Hypothetical example. APR may differ; example only. Rates change daily. On $300,000 over 25 years, the principal-and-interest payment is about $2,168 at 7.25% and about $2,026 at 6.5%.

Example details: $300,000 25-year fixed at 7.250% (7.284% APR): 300 monthly payments of $2,168.42; $300,000 25-year fixed at 6.500% (6.529% APR): 300 monthly payments of $2,025.62. Principal and interest only; taxes and insurance not included, so the actual payment will be higher. Unless noted, APR assumes ZERO Closing Costs, no discount points and 15 days of prepaid interest. Hypothetical example prepared November 4, 2026, not a current CapCenter rate offer; subject to credit approval.

• What are my current rate, balance and years left?
• What rate could I get today with my credit and equity?
• How long will I stay in the home?
• Will I pay any closing costs or points?
• Do I want a lower payment, a shorter term, or both?