Replacing a loan with a new one on better terms.
Refinancing swaps your existing mortgage for a new one, usually to cut the rate, shorten the term or pull out equity.
It is not free: closing costs typically run two to five percent of the loan. The decision turns on the break-even point — monthly saving divided into total closing costs gives the number of months before the refinance pays for itself. Move out before then and you lose money.
Restarting a 30-year clock can also raise lifetime interest even when the monthly payment drops.
With the 30-year average at 6.76%, refinancing only makes sense if your current rate is meaningfully above it — and the saving clears your closing costs before you move.
See the 30-yr mortgage page