There isn’t an easy answer to when you should refinance your mortgage. Generally speaking, you’re much better off choosing a 10- or 15-year mortgage for your refinance. Chances are you’ve been in your home and paying on the mortgage for several years. If you have home equity, refinancing what you owe (rather than the appraised value) will keep your mortgage principal low – and lower your payment. The shorter the loan period, the less you pay in interest expenses, even if the monthly payments might be higher.