Should you refinance with the same lender?

In 2025, an overwhelming majority of borrowers ended up paying more than the best mortgage rates available to them due to a lack of market research, according to Bankrate's Hidden Homeownership Tax research. Refinancing can significantly reduce interest rates and save thousands of dollars on loan costs. However, sticking with your current lender out of convenience could result in paying a hidden "loyalty tax."

Refinancing with your current lender or switching to a new one is entirely possible, but convenience should not be the sole deciding factor. The real question is whether switching lenders is the smarter move for your finances.

Refinancing with your current lender is an option, but it may come with a "loyalty tax." This tax is not a genuine discount but rather an offer calibrated against your reluctance to switch, not against the actual market rates. To determine if this discount is real, compare your current lender's offer against quotes from other lenders. If their offer doesn't match the best one, consider switching.

When deciding between staying with your current lender or switching, consider factors such as interest rates, closing costs, satisfaction with your current lender, ease of application, convenient payment, and account consolidation. While your current lender may offer a competitive rate or terms, these are often calibrated against your reluctance to switch, not against what you could qualify for elsewhere. The only way to know if their offer is competitive is to compare it against outside quotes.

Before deciding, compare today's refinance rates and consider the potential savings. For example, if you have a $300,000 balance on a 30-year fixed mortgage at a 7.75% interest rate, your current lender offers a new loan at 7.15%. Although this is a real improvement, it is still well above the current market average of 6.78% and the best rate you could find by shopping around.

Refinancing to this rate would cost you tens of thousands of dollars in extra interest over the loan term. Therefore, it is essential to run your own numbers using Bankrate's mortgage refinance calculator to make an informed decision.