If you do a full re-fi; the new lender is going to run your credit, do an appraisal of your home, record the new loan on the title, do a title search, purchase title insurance, pay the broker's commission, etc; that all costs money, and that's where the thousands come from.

Just adjusting the rate in their systems certainly doesn't cost the lender nearly $500 or $1000, but it was still a win-win. They got some money to offset the lower rate, and got to keep servicing the loan, and I got to pay less interest, it's been a while, but I seem to recall my break even was about 3 years each time. I would certainly consider the availability and price of rate modification when considering lenders in the future.