The most useful question is how long it takes for monthly savings to recover the upfront costs. If you expect to stay in the home well beyond that point, a refinance can pay off, but a short timeline can turn a seemingly good rate into a loss. Timing matters too, because a loan in process is exposed to rate movement until it locks. When a closing date is close, locking protects a borrower from a sudden jump, while a longer timeline may allow some borrowers to float if they have a clear reason and a backup plan. Ask your loan officer whether a float-down option is available, since it can offer some protection if rates improve after you lock.

Homeowners with a rate well above current offerings and many years left on their loan often have the most to gain from reviewing their options now. Borrowers with adjustable-rate mortgages approaching a reset should look at refinancing sooner rather than later, since the payment change could arrive before the market settles. Those who have built meaningful equity may find that a cash-out refinance or a move to drop mortgage insurance changes the picture. On the other hand, someone with a very low existing rate that still fits their budget may be better off staying put and revisiting the question later. Each household's situation is different, so a written side-by-side comparison beats a general rule of thumb.