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We have 10 years left on our mortgage. Should we refinance?

November 30, 2012: 6:30 AM ET

We currently have 10 years and eight months left on a 15-year mortgage at an interest rate of 5.125%, with a balance of $210,362. Is it smart to refinance now with a 10-year note at approximately 3% and cut eight months off the mortgage? —Angela P.

In a word, yes. But remember that you'll likely have to fork over several thousand dollars in closing costs to get that new mortgage, says Glenda Moehlenpah of San Diego, Calif.-based Financial Bridges. If you plan on staying in your house for long enough to break even on those closing costs, then refinancing probably makes sense.

Fortunately, you don't have to do this math yourself. Plenty of online calculators can help you figure out how long it will take to recoup the cost of refinancing, such as Bankrate's break-even calculator.

A key benefit of refinancing, or course, is to save money. And in this case, it's likely that you'd save a bundle: Moehlenpah calculates that dropping your interest rate by more than two percentage points would save you more than $33,000 in interest payments over the next decade.

— Austin Kilham

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