Refinancing mortgages can be a good option for some older homeowners, as it can save them money by lowering interest rates and monthly payments, and potentially changing some of the loan’s features. Put simply, refinancing is replacing the old mortgage with a new one. This can also enable older homeowners to tap into their home equity to sustain their retirement, or start renovations.
And the market is ballooning. In 2026, Redfin expects mortgage refinance volume to increase around 30%, with a total of $670 billion.
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“More Americans will refinance largely because 20% of mortgaged homeowners have a rate above 6%, and those who bought recently with an elevated rate are chomping at the bit to bring their monthly payments down,” Redfin said in a report.
But a new Bankrate investigation found that some older homeowners may be paying significantly more than they should to refinance due to what it calls a “seniority tax.”
What is a Seniority Tax?
High-pressure sales tactics, misleading refinance pitches, and commission-driven lending practices are some of the culprits, according to the investigation.
Numbers speak for themselves: The analysis found that refinance applicants 55 and older overpay at rates nine percentage points higher than borrowers under 35. On average, lifetime overpayment amounts to 19% to 20% of the loan balance, or nearly $2,400 in 2025. Over a 30-year repayment period, it can add up to a whopping $52,000.
Bankrate home lending expert Linda Bell said that older Americans typically have longer credit histories and stronger credit scores, so you might expect them to qualify for the lowest refinancing costs.
However, Bankrate data shows the opposite is happening, she said.
“The older you are, the more likely you are to overpay. Our watchdog reporting found that aggressive sales tactics, combined with a reluctance to shop around and an aversion to technology, can leave many middle-aged and older borrowers paying more than they should,” Bell said. “While refinancing can be the right move for some, consumers should tune out the sales pressure to decide if it’s the right move for them.”
Red flags seniors should be wary of when they want to refinance
Egregious sales tactics
To conduct its research, Bankrate coupled its proprietary mortgage data with a watchdog investigation, including interviews with 12 home loan professionals and industry insiders, and an analysis of more than 230 Consumer Financial Protection Bureau (CFPB) complaints from older homeowners.
Bankrate lead watchdog reporter Andrew Pentis said the most egregious sales tactics they uncovered included convincing borrowers to refinance even if the benefits wouldn’t outweigh the costs. The most glaring example, he said, involved convincing a senior to refinance by offering him a skipped monthly payment he could use to visit his grandkids.
“We liken these ‘deals’ to snake oil because there’s no genuine benefit to the consumer. The benefit is to the lender that gets a nice piece of business,” he said.
“The older you are, the more likely you are to overpay. Our watchdog reporting found that aggressive sales tactics, combined with a reluctance to shop around and an aversion to technology, can leave many middle-aged and older borrowers paying more than they should.”
Pushing lower monthly payments
A potential red flag is if a salesperson keeps bringing everything back to the monthly payment.
Steve Sexton, CEO of Sexton Advisory Group, said that if someone tells you they can save you hundreds of dollars a month, it could sound appealing at first.
“But what if you only have eight-10 years left on your mortgage and they’re putting you into a brand-new 30-year loan? Your payment goes down, but now you may be paying interest for another 20 years,” Sexton said.
Pressure to move quickly
Another suspicious sign is pressure to move quickly.
Sexton said that if someone tells you the deal is only good today or that you need to sign right away, that should make you slow down, not speed up.
What can older homeowners do not to fall prey to these tactics
Screen your calls
Pentis said their reporting shows that some national lenders operate call-center-style sales floors that cold-call borrowers all day long, and, unfortunately, older homeowners are more likely to pick up.
“So, one tip is to screen your calls, and remember that refinancing, like other financial products, isn’t necessarily the best move just because a salesperson says it is,” he said.
Shop around
In addition, older homeowners are more susceptible to overpaying on mortgage refinancings because they’re more likely to maintain long-standing relationships with their financial institutions, he added.
His advice: if you’ve decided that refinancing is right for your situation, compare at least three to five different types of lenders to increase your odds of negotiating the lowest rate, but also the best overall loan.
Cody Schuiteboer, president and CEO of Best Interest Financial, echoed the sentiment, noting that you should never accept just one quote for the same loan and the same day.
Instead, always compare the full package of terms, rates, points, and fees, not just the monthly payment.
“By forcing the banks to compete, you neutralize the overpayment issue almost completely,” he said.
Pay attention to the fine print
In addition to shopping around, Sexton also urged you to make sure you’re comparing the same type of loan, because one lender may be showing you a lower rate with much higher upfront costs.
In turn, make sure you pay attention to points and fees, as sometimes a lender will advertise an attractive rate, but you’re paying a lot upfront to get it, he said.
And this may or may not make sense depending on how long you plan to stay in the home, Sexton said.
“I’d also focus less on “how much will my payment go down?” and more on “what is this actually going to cost me?” Look at the closing costs, the new loan term and how long it will take you to break even. If you’re spending $8,000 to refinance and only saving $200/month, it takes more than three years just to get your money back,” he added.
Be aware of additional fees
Refinancing is replacing an existing mortgage with a new one, so borrowers incur all the costs associated with obtaining a new mortgage.
These include administrative and third-party fees, an application fee, an origination fee, an appraisal fee, credit report fees, and underwriting fees, according to Freddie Mac.
While total closing costs vary, they generally range from 2% to 6% of the new loan amount.
“So, for a $300,000 mortgage, closing costs can be 18,000,” home equity expert Michael Micheletti, chief communications officer at Unlock, said. “Many people who don’t have that kind of out-of-pocket money hear that they can “roll the closing costs into” the new loan amount, and do so. Again, it doesn’t affect the interest rate, but since the loan balance is larger, you pay more total interest over the life of the loan.”
Ask for advice
If you’re not sure whether refinancing is right for you, or if you fear you might be at risk of overpaying, consider talking to a U.S. Department of Housing and Urban Development certified housing counselor, financial advisor or knowledgeable family member or friend who doesn’t have a stake in your refinancing application, Bankrate’s Pentis said.
And experts agree that homeowners should never feel rushed.
“Just because a lender says you qualify for a refinance doesn’t mean refinancing is the right move,” Sexton said.
