Interest rates are at record lows, which makes this a pretty fantastic time to refinance.

But there's just one problem: An increase in refinance applications has been accompanied by an increase in refinancing fees charged by banks, who are eager to recoup some of the money they lost making bad loans.

Bloomberg reports that "Home refinancing is forecast to hit a two-year high and banks are reaping the profits as mortgage origination fees are the costliest in eight years, according to data compiled by the Federal Housing Finance Agency."

Of course this is a complete ripoff for consumers: Taxpayers are bailing out the banks with one hand, and then paying inflated fees with the other.

But for people who are considering refinancing a mortgage, the key phrase to remember is this: "economies of scale." Refinancing a $400,000 mortgage does not cost much more than refinancing a $100,000 mortgage but assuming similar interest rates, the monthly savings will be vastly different.

What this means is that if you have a relatively small loan balance, there's a very good chance that soaring refinancing fees will make it a bad economic decision to refinance, even though the monthly savings are substantial.

Use a break-even analysis calculator like this one to decide whether it's worth refinancing.