The institution that holds our mortgage has sent us three offers in the last three months to refinance our mortgage. Normally, I don't even open or seriously consider solicitations like that, but because they came from them, I had a look to make sure there wasn't anything I needed to know about our account.
What struck me was that they were all offering a completely free refi at a lower rate (we are at 4.875%; they were offering rates in the 3.5-3.8% range) for the balance of the loan, or a shorter term. We could even keep the exact same time table we're on, if we wanted to, and just drop down to a lower rate.
After giving it some thought and returning to my general distrust of solicitations, I decided not to pursue it and just keep making extra payments as we are. I can't help but wonder, though, how the bank makes money on something like this? Assuming they're not just super nice and all, what's in a refi like this for them? I find it hard to believe they'd make offers like this that wouldn't produce some kind of new revenue for them.