Educational content only. Rates, fees, eligibility and policy terms can change. Verify current details with the relevant provider or official source.
Basic break-even formula
A simple estimate is eligible refinance costs divided by monthly payment savings. For example, $6,000 of costs divided by $200 of monthly savings equals a 30-month break-even period.
Include the full cost
Review lender fees, appraisal, title-related charges, points and other costs shown in the Loan Estimate. Financing the costs still means borrowing that amount.
Compare the new term
A lower rate can still produce more total interest if you restart with a much longer term. Compare remaining payments on the old loan with total payments on the new loan.
Read official disclosures
Mortgage offers should be compared using standardized disclosures such as the Loan Estimate and Closing Disclosure.