A lower rate is only worth having if you keep the loan long enough to earn back what it costs to get it. This works out the month that happens.
Principal and interest only.
What each path costs in total interest.
It is the number of months it takes for your monthly savings to cover the cost of doing the refinance. Divide the total closing costs by the monthly saving. If you expect to keep the loan comfortably past that point, refinancing usually makes sense.
No. Restarting a 30-year term can increase the total interest you pay even at a lower rate, and closing costs have to be earned back. The break-even month and the lifetime interest figure together tell you more than the rate difference alone.
You can on a refinance, and it avoids paying cash — but you then pay interest on those costs for the life of the loan, so the true break-even is longer than it looks. This calculator lets you compare both ways.
An estimate for planning, not a quote or a commitment to lend. It compares principal and interest only — taxes, insurance and mortgage insurance are excluded because they are usually unchanged by a refinance. Your actual costs and rate depend on your credit, equity and the program.
Send us your current statement and we’ll tell you honestly whether it’s worth doing — including when it isn’t.