How do I evaluate whether refinancing my mortgage is worth it?

Refinancing makes sense if you can lower your interest rate sufficiently to cover refinancing costs and meet your objectives. Calculate the break-even period: total refinancing costs divided by monthly savings from the lower payment. If you plan to stay in the home longer than the break-even period, refinancing is likely beneficial. Also consider refinancing to change loan length (shorten to pay less interest overall, lengthen to lower monthly payments), to cash out equity for higher-return uses, or to convert between adjustable and fixed rates for stability. Factor in closing costs, prepayment penalties on the current mortgage, potential tax implications, and whether reducing payments might tempt you into suboptimal spending.