The prevalent reason people refinance their loan is to take advantage of a lower interest rate.  Other reasons may be to save on monthly payments and to change the term of the loan. People also choose to refinance if they want to switch from an adjustable rate to a fixed rate or to consolidate debt by refinancing for a higher loan amount and using the difference to pay off other debt.

An easy way to see if it makes sense to refinance your existing loan is to go to a bank’s website and use their calculator feature.  Input the present fixed 30 or 15-year interest rate and the amount you owe on your home, as well as the amount you pay for interest and taxes on a yearly basis.  Compare the resulting monthly payment to the payment you are making under your existing loan.