With mortgage rates lingering at around 3% over the past few months, refinancing is becoming an increasingly popular option among homeowners, even for people nearing retirement age. Although not right for everyone, refinancing in later life can in some cases be a smart money-saving move. To find out if you should refinance your home in your 50s or 60s, you’ll need to consider a range of factors including your retirement plans and how long you’ll stay in your home for, as well as your current mortgage interest rate and remaining term period.

What are your retirement plans?

Determining whether refinancing is the right option for you should, above all, involve taking your retirement plans into account. If you plan on moving, downsizing to a smaller, more manageable property is usually a smart option. Or, if you intend to stay in your current home, consider if any known existing health conditions may force you to move in the future. Refinancing is only worthwhile if you know you’ll be able to make back the closing costs as well as profit from the monthly savings provided by the lower rate. Keep in mind rates offered can vary from lender to lender depending on factors like your credit score and home appraisal, so be sure to shop around before making a final decision. You may even find a refinance option with no closing costs — these are usually offered by mortgage firms rather than banks. However, this does typically mean the interest rates will be higher. A home loan refinance calculator can help you figure out how much you can save by refinancing. By working out the breakeven point (when your savings start to eclipse the closing costs), you’ll be able to find the best refinance option to suit your circumstances.

How much is left on your mortgage?

It’s also important to consider how much you have left on your mortgage. If you’re only a few years into your thirty-year loan period, it’s likely not wise to start again with another thirty-year mortgage, which you may only pay off in your 80s. Alternatively, if you’re already at least 15 years through, then you may want to refinance to a 15-year mortgage, which usually offer better rates than 30-year ones. Your new refinance rate should ideally let you recoup closing costs fast (within one or two years). If you’re already well into your original 30-year mortgage term, making extra payments towards this may be a better option than refinancing. Paying your mortgage off early can save you a significant amount in interest and closing costs.

Refinancing your home in later life may not be the right financial move for everyone. By carefully considering your plans for retirement, how much you have left on your current mortgage, and the new rates offered by refinancing, you’ll be able to make the right decision for your unique circumstances.