The remaining term on your current mortgage is another important factor in deciding to refinance. If you have many years left to pay on your mortgage, then refinancing your home may make financial sense. If you are closer to paying off your mortgage, then refinancing might not make sense. That’s because mortgages are usually structured so you pay most of the interest before you pay back the principal. This means in the early years of a mortgage, a lot of your monthly payment goes to interest. In the later years, a lot goes to principal. You might not save much money by refinancing in this case, especially if you have to pay closing costs. Another reason not to refinance a mortgage you are close to paying it off is because you might have to extend the loan term. This can happen when you change lenders. Many lenders don’t want to offer mortgages with short terms. For example, the shortest mortgage some lenders might be willing to offer could be 15 years. If you have less than 15 years left to pay on your current mortgage, refinancing might cost you more money in interest over the life of the loan because you are paying back your mortgage over a longer period of time.