A no cash-out refinance is a new mortgage that covers all existing liens and closing costs for the refinance. This is usually done by home owners who wish to take advantage of lower interest rates without adding to their mortgage amount. A rule of thumb for deciding on the cost effectiveness of such a refinance is that the interest rate should be at least one percent lower than the existing mortgage's interest rate. Another instance where home owners may want to refinance with a no-cash out refinance is when they can significantly decrease the number of years of the repayment period for the mortgage; this can save thousands of dollars in interest in many cases. Home owners thinking of a refinance should contact a lender for specifics on loans available.