Other than possible lender-imposed waiting periods after a mortgage loan closes, you can generally refinance your home as many times as you like. But you’ll want to do the math first.
Homeowners choose to refinance for a number of reasons: to lower monthly payments, take advantage of lower interest rates, get better terms, pay the loan off more quickly, or eliminate private mortgage insurance.
Refinancing involves paying off the current mortgage with a second loan that has (ideally) better terms. Borrowers don’t have to stay with the same lender – it’s possible to shop around for the best deals.
Mortgage rates seem to be constantly in flux, moving mostly in parallel with the federal interest rate. In 2021, the average rate of a 30-year fixed mortgage was 2.96%. In 2022, as the Federal Reserve raised interest rates to try to tame inflation, mortgage rates began to rise and jumped to more than 7.00% in October. By mid-May 2025, the average rate of a 30-year fixed mortgage was 6.81%.
So is now the right time for you to refinance? Here are some things to consider before taking the plunge.
Key Points
• Homeowners can refinance as many times as desired, but lenders may impose waiting periods.
• Closing costs for refinancing typically run between 2% to 5% of the loan amount, impacting savings.
• When you’re refinancing, a lower monthly payment doesn’t always mean long-term savings.
• Many factors affect your refinance interest rate, including how much equity you have in the home and what the loan terms are.
• The break-even point is when you recoup the cost of refinancing through savings. It’s important to figure out when that will occur when you’re evaluating whether a refinance is worth it.
The Basics of Mortgage Refinancing
Because a homeowner who chooses to refinance is essentially taking out a new loan, the cost of acquiring the new loan must be compared with potential savings. It could take years to recoup the cost of refinancing.
As with the initial mortgage loan, a refinance requires a number of steps, including credit checks, underwriting, and possibly an appraisal.
Typically, however, many homeowners start with an online search for the rates they qualify for. (A lower average mortgage rate doesn’t necessarily translate to an individual offer—creditworthiness, debt-to-income ratio, income, and other factors similar to what’s required for an initial mortgage will matter.)
The secret sauce that makes up a mortgage refinance rate might seem like a mystery, but there are some common factors that can affect your offer:
• Credit score: As a general rule, higher credit scores translate to lower interest rates. A number of financial institutions and credit card companies will give account holders access to their credit scores for free, and a number of independent sites offer a free peek, too.
• Loan term/type: Is the loan a 30-year fixed? A 15-year? Variable rate? The selected loan repayment terms are likely to affect the interest rate.
• Down payment: A refinance doesn’t typically require cash upfront, the way a first-time mortgage usually does, but any cash that can be put toward the value of a loan can help reduce payments.
• Home value vs. loan amount: If a home loan is extra large (or extra small), interest rates could be higher. But generally speaking, the less the mortgage amount is compared with the value of the home, the lower the interest rates may be.
• Points: Some refinance offers come with the option to take “points” in exchange for a lower interest rate. In simplest terms, points are discounts that lower your interest rate in exchange for a fee you pay upfront.
• Location, location, location: Where the property is physically located matters not only in the determination of its value but in the interest rate you might receive.
What Types of Refinance Loans Are Out There?
As with first-time home loans, consumers have a number of refinance mortgage options available to them. The two most common types involve either changing the terms of the original loan or taking out cash based on the home’s equity.
A rate-and-term refinance changes the interest rate, repayment term, or sometimes both at once. Homeowners might seek out this type of refinance loan when there’s a drop in interest rates, and it could save them money for both the short term and the life of the loan.
A cash-out refinance can also change the terms or interest rate, but it includes cash back to the homeowner based on the home’s equity.
Within those two basic types of refinance options, conventional mortgages from traditional lenders are the most common. But refinancing can also happen through a number of government programs.
Some, like USDA-backed loans, require the initial mortgage to be a part of the program as well, but others don’t, such as the VA loan program, which has a VA-to-VA refinance loan called an interest rate reduction refinance loan and a non-VA loan to a VA-backed refinance. That’s why it’s important to shop around to find the best option.
How Early Can I Refinance My Home?
If a home purchase comes with immediate equity — it was purchased as a foreclosure or short sale, for example — the temptation to cash out immediately with a refinance may be strong. The same could be true if interest rates fall dramatically soon after the ink is dry on a mortgage. Especially for conventional loans, it may be possible to refinance right away. Others may require a waiting period.
For example, there can be a six-month waiting period for a cash-out refinance. Or, refinancing via government programs like the FHA streamline refinance or VA’s interest rate reduction refinance loan can require waiting periods of 210 days.
Lenders can require a waiting period (also called a “seasoning period”) until they refinance their own loans for a number of reasons, including assurance that the original loan is in good standing.
For a cash-out refinance, some lenders may also require that the homeowner has at least 20% equity in their property.
Questions to Ask Before You Refinance
Just because you can refinance doesn’t necessarily mean you should. First, ask yourself these questions.
What Is the Goal?
Identifying the endgame of a mortgage refinance can help determine whether now is the right time. If a lower monthly payment is the goal, it can be wise to play around with a refinance calculator to see just how much a lower interest rate will help.
For years, it has been a general rule that a refinance should lower the interest rate by at least two percentage points to be worth it. Some lenders believe one percentage point is still beneficial, but anything less than that and the savings could be eaten up by closing costs.
What Is the Total Repayment Amount?
It’s important to remember that a lower monthly payment—even if it’s significantly less—doesn’t necessarily equal savings in the long run.
If a mortgage with 20 years remaining is refinanced to lower the monthly payment, for example, the most affordable option could be a 30-year mortgage. But is the lower monthly payment worth it if you’ll be paying it off for 10 additional years?
Will I Need Cash to Close?
One of the biggest differences between a first-time mortgage and a refinance is the amount it costs to close the loan. Many times, closing costs for a refinance can be rolled into the loan, requiring no cash at the outset.
Closing costs typically come in at 2% to 5% of the loan amount, and although they can be rolled into the loan and paid off over time, that could mean the new monthly payment isn’t as low as planned.
One way to make sure the investment is worth the cost is to consider how long it would take you to reach the break-even point, which is when you recoup the costs of refinancing. For instance, if it takes you 24 months to reach the break-even point, and you plan on living in your home for at least that long, refinancing may make sense for you.
The Takeaway
Technically, you may be able to refinance your home as many times as you like. But there are potential limiting factors, like waiting periods with some loan types and lenders, and lender’s preferences, for instance. Additionally, having to pay multiple sets of closing costs can limit the financial benefits of refinancing. That said, if you do your homework, a refinance can be a smart, strategic choice.
SoFi can help you save money when you refinance your mortgage. Plus, we make sure the process is as stress-free and transparent as possible. SoFi offers competitive fixed rates on a traditional mortgage refinance or cash-out refinance.
FAQ
Is there a downside to refinancing multiple times?
Typically, the biggest potential downside to refinancing multiple times (or even once) is the cost of closing, which usually runs between 2% and 5% of the loan amount — each time you refinance. Additional downsides are losing equity in your home and, depending on the kind of refinance you get, potentially extending the period of time during which you have to make payments.
How frequently can you refinance a mortgage?
Technically, there is no limit on the number of times you can refinance your mortgage, assuming that you can find a lender willing to accommodate you. Bear in mind that each refinance will typically come with its own set of closing costs, so it’s important to calculate whether a given mortgage refi will make sense financially for you.
Does refinancing hurt your credit score?
Applying to refinance your mortgage could potentially result in a small, temporary dip to your credit score. That’s because the lender usually performs a hard inquiry to check your credit. Also, refinancing involves closing your old loan and taking on a new one, which can also affect your credit score slightly.
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