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Refinance decision guide
Use this calculator to compare your current loan with a potential refinance. The goal is to see whether the new loan improves your total cost, payment structure, or term.
Rate vs term tradeoff
Lower rates can reduce interest, while shorter terms build equity faster but raise payments.
Closing costs
Refinancing has fees that must be recouped through monthly savings. Compare net savings, not just rates.
Time horizon
The longer you plan to stay in the home, the more time you have to benefit from a refinance.
How break-even works
- Break-even is the point where cumulative savings exceed closing costs.
- If you plan to move before break-even, refinancing may not pay off.
- Use total cost comparisons, not just monthly payment changes.
Reasons to refinance
- Lower the interest rate or convert to a fixed-rate loan.
- Shorten the term to reduce total interest paid.
- Reduce payment volatility or consolidate debt.
Reasons to wait
- You plan to move soon or sell the home.
- Closing costs outweigh savings in your time frame.
- Your credit profile or income is in transition.
Refinance calculator FAQ
When should I refinance my mortgage?
Consider refinancing when the new loan meaningfully improves your total cost, payment structure, or term. The break-even point is when cumulative savings exceed closing costs.
What is a break-even point in refinancing?
The break-even point is the number of months it takes for your monthly savings to equal the closing costs of refinancing. After this point, you start saving money. Calculate it by dividing closing costs by monthly savings.
What are typical refinance closing costs?
Refinance closing costs vary by lender and location and can include appraisal fees, title insurance, origination fees, and other charges. Some lenders offer no-closing-cost options with different pricing.
Does refinancing always reduce monthly payments?
Not always. Shortening the term or rolling in costs can increase payments. Compare total cost and goals, not just the payment amount.