Advisors used to say interest rates should drop by 2 percent before homeowners consider refinancing a mortgage. But with a large mortgage, just 1 percent is fine.
On a $300,000 30-year fixed rate loan at 7.25 percent, the monthly payment would be $2,046.53. At 6.25 percent, it would be $1,847.15, a reduction of about $200 per month.
Closing costs can be significant, from 2 to 5 percent. So you'll want to see when you break even.