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The refinanced mortgage could also save you the cost of private mortgage insurance. If you put less than 20 percent down on your original mortgage, your lender likely saddled you with the coverage. If your refinanced mortgage is less than 80 percent of your home's value today—a likely scenario given current appreciation rates--you won't have to pay PMI premiums of $50 or more a month.

Automatic refinance loans

A growing number of lenders also offer special mortgages that act like an ARM in reverse.

Called "automatic refinance mortgages" or "reverse-rate mortgages," the loans come with a guarantee that your interest rate will drop by as much as 1.5 percentage points below your starting rate--even if market rates are higher at the time.

Designed primarily to give less creditworthy borrowers a chance to prove they can make mortgage payments on time and over time, the loan comes with annual interest rate decreases spread out over a couple of years. After a few adjustments down, the rate becomes fixed. You must make all payments on time, maintain a good credit standing and not fall below the income level you listed on your loan application.

Refinancing your loan can slash your borrowing costs. But some fixed-rate loans will cost you more to refinance than you could possibly save. In some cases, you’ll be better off doing nothing. E-Loan can help you find the answers you're looking for.

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