One good reason to refinance is to decrease your monthly payment. Say, on your $200,000 mortgage it will be a sensible reason to refinance if you are on a 7% or more interest rate payment. Suppose with no fees charged upfront, you refinance into a 6 1/4%, your calculation will probably conclude that you get to save $147 monthly and annually, $1764. Thus, your home will have treasured adequately and your remaining mortgage balance will have equaled 80% of the current property value. Then refinance into a mortgage of lower interest which do not need PMI.    

Another reliable reason to refinance would be to swap into another mortgage. Years ago, when you were planning to move on, you may have bought using a five year fixed mortgage that can be switched to an adjustable. Now that you want to stay longer, refinancing into a thirty year fixed mortgage will be a reasonable choice. However refinancing is not suitable for all concerned. Suppose you have a low mortgage balance that you have been paying for sometime and you want to refinance in the 7% range, if you calculate properly, the savings will not be that much. Remember, when you refinance a thirty year mortgage again, you have to start the payoff from the beginning; meanwhile for a five year loan, you have only twenty five years left. Therefore the most logical reason is to refinance into a fifteen year loan from a thirty year fixed loan. Of course it will be a higher monthly payment, but with lower rate of interest. Thus, the total interest will be much lower comparatively. Better still, choose a no fee mortgage product, you will save more.  

For some, refinancing on and on simply to save a few sums has become a habit. Its not quite right to let refinancing to pay off all your debt. Well, of course the advantage of owning a property is to make an enforced savings. Every month you pay back a share of the sum borrowed; it can over the years accumulate a tidy saving. 

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