On most no-fee refinances, the break-even point is between about three-and-a-half and five years, Donhoff says. Typically, a no-fee mortgage adds $40 to $100 a month to your mortgage payment, depending on the size of your loan, he says.

Moskowitz gives an illustration of how this works: Let's assume you get a $200,000 loan, fixed for 30 years at 4% interest with a monthly payment of $955. The loan fees are $2,000 if paid in cash. But if you choose a zero-fee option, the interest rate rises to 4.25% and the monthly payment to $983 — around $360 a year extra to cover the fees.

At $360 a year, it'll take you 71 months — around six years — to break even on the deal. If you sell or refinance before then, you're ahead. Even for a while afterward, if the slightly increased cost of financing is worth more to you than producing $2,000 in cash now, it's still a good deal.

But it becomes less of a good deal with every month that passes after the break-even point. By the time 10 years have rolled around, you'll have paid $3,600 for $2,000 worth of fees.

The average homeowner moves every five to seven years, says Mike Fratantoni, vice president of research for the Mortgage Bankers Association. As mortgage rates fall, people tend to refinance more frequently.

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First calculate the break-even point on no-fee loan offers and then ask yourself, "How long will I keep this loan?" Moskowitz says.

Richard Booth, a mortgage banker himself, did the math recently on refinance offers he was given and decided to pay his fees out of pocket.

Sometimes a "no-fee" mortgage includes all your fees, sometimes just a few. The quotes that Booth received included just bank fees and appraisal — worth $850 if paid in cash.

"The no-fee would have raised my monthly payment by $26.94, not a huge amount," Booth says. The extra cost might have been worth it if he expected to sell or refinance soon.

The break-even point for the fees was 31 months. But he'd have kept paying $26.94 extra each month for 27.5 more years — a total of $9,698.40 extra in interest charges for the no-fee option. 

But Booth plans to keep the mortgage and accelerate the payments to pay it off early. He lost a little tax benefit by paying cash, he concedes. But that didn't matter. "My goal for my particular situation is that I wanted the loan paid off in 15 years," he says.

Adding to your loan balance
The other way to finance your fees is to add them to the amount you borrow. If your mortgage is $200,000 and the loan fees are $2,000, your loan balance grows to $202,000. You pay interest on the higher balance. At first glance, the two options look similar. But there are differences.

Harrison sees no advantage to increasing a loan balance to pay fees. If you pay the fees with a higher interest rate, you'll get a larger home-mortgage-interest tax deduction than you would by adding to the loan balance, he says.

Read:  Should you pay off your mortgage early?

"If you go with the higher interest rate and rates continue to decrease, you can always refinance that, whereas when you go with the higher balance, when you got to refinance, you're starting out with a new, higher balance.

"For most people," Harrison says, "the relevant comparison is a 'no-fee no points' loan versus paying a couple thousand in closing costs."