The traditional rule: refinance when rates drop 1% below your current rate. With a 1% drop on a $300K loan, you save roughly $3,000/year in interest — covering typical closing costs within 2-3 years.
If your break-even point (closing costs ÷ monthly savings) is under 36 months AND you plan to stay that long, refinancing is a clear win. For shorter stays, the costs may not justify the savings.
Divorce (removing a spouse), inheritance, retirement, or change in income — refinancing can restructure the loan around your new circumstances, even if rates haven't changed significantly.
If your adjustable-rate mortgage is about to reset higher, refinancing to a fixed rate locks in certainty — especially valuable when rates are trending upward.