Whether it’s worth refinancing will depend on market conditions and your financial situation. “One should consider refinancing a home when they can substantially reduce the interest rate they are paying,” Orlando says. According to Orlando, cutting your interest rate by 2 percentage points would be considered substantial. Additionally, he says it can be worth refinancing if you’ve received a promotion or raise, and your income has significantly increased to the point where you can afford higher monthly payments to pay off your home sooner. “These types of substantial changes can help reduce a homeowner’s debt, and rapidly increase the equity in the property,” Orlando says. However, if interest rates have increased or remained steady, it might not be worth refinancing. “If a person chooses to refinance when there is no adjustment in the interest rate, they are taking on additional debt, which can cause them to have larger monthly payments than they currently have,” Orlando says. “Depending on a person’s income, this could severely affect a person’s monthly payment amount, and their overall ability to make those payments.”