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Refinancing to a rate between 6.5% and 7% is still a pretty good deal, says Frank Nothaft, deputy chief economist at Freddie Mac, which buys mortgages for resale on the bond markets. He expects rates to stay in that range into the new year.

Youre a candidate to refinance if you can lower your monthly payment and recover the closing costs before you move--or refinance again. Take the total cost of the refinance and divide it by your monthly savings.

That tells you how many months it will take to recover your costs. What if you have a close call--say, a $200,000 30-year loan with a fixed rate of 7.5%? Should you refinance to 6.8% with no points and $2,600 in fees, which youll roll over into your new loan amount? Refinancing will lower your monthly payment by $77--and it will take 34 months to break even--so maybe youll want to wait for a lower rate.

The calculators at can help you figure out your own break-even point. Many refinancers are replacing 30-year loans with 15-year mortgages, which offer about half a point break on the interest pared with the 30-year term.

Rates on 20-year mortgages fall in between those two. A $200,000 30-year fixed loan at 6.7%, for example, carries a payment of $1,291 per month.

Cutting the term in half, to 15 years, at 6.37% costs $440 more per month. Although shorter-term mortgages, save a lot in interest over the life of the loan, your monthly payments will be higher.

You may e out ahead if you get a 30-year loan and invest the difference. Still, shorter-term loans can be a good idea for people whod like to get rid of their mortgage in time for retirement.

Almost anyone still left in an adjustable-rate mortgage would be better off refinancing into a new fixed-rate loan. Usually the first year of an ARM is artificially low, and you could be in for a full two-point rise at your first anniversary.

That puts you roughly at todays 30-year fixed rate. With rates at a historical low, its better just to go to a fully amortizing 30-year fixed rate, says Brown of Countrywide.

Who knows when were going to get here again? POINTS OR NO POINTS? Most refinancers choose a no-points loan--partly because the prepaid interest on a refinance is not immediately tax-deductible as it is on a home-purchase loan. You have to deduct them over the life of the loan.

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