Should you refinance?
A lower rate and a smaller payment are only half the story. Refinancing costs money too. What actually decides it is your break-even point: how many months of savings it takes to cover the refinance fee.
The rate gets all the attention but break-even is the number that tells you whether a refinance is worth doing at all.
In three steps
Breakeven calculator
See exactly when this refinance pays off
Your numbers
Analysis
Does this refinance make sense for you?
Compared to your current loan
| Current loan | New loan | |
|---|---|---|
| Payments remaining | 300 | 360 |
| Monthly payment | $2,023 | $1,654 $369/mo |
| Total interest | $307,185 | $295,985 $11,200 |
You break even in month 17 (Dec 2027)
That's 8 yrs 7 mo before you plan to move on. From there, the $368/mo keeps landing in your pocket, adding up to about $38,186 by the time you go. For your plans, this refinance pays for itself.
Where your break-even lands
A good break-even is relative to how long you will keep the house for. The scale below is set against a typical 7-year stay. If you're moving sooner, everything shifts left.
If you'll earn the cost back in under two years and you're not moving soon, refinancing is usually a no-brainer. Past five or six years, I tell people to think twice.
Next step
See what you'd qualify for today
An estimate: Mortgage rates shown are estimates based on current market conditions and are not a commitment to lend. Actual rates depend on credit score, down payment, loan type, property type, and other factors. All loan products are subject to credit and property approval. Ralo Corporation (NMLS #2751459) is a licensed mortgage broker.