Refinance Calculator
Should you refinance? Calculate your break-even point and see if the savings are worth the closing costs.
Monthly Difference
$0
Your payment will increase.
Break-Even Point
Never Years
Time to recover your $5,000 closing costs.
Understanding Break-Even Point
Refinancing costs money upfront (closing costs). The break-even pointtells you when your monthly savings pay back those costs. This is the most important number when deciding to refinance.
📊 Example
Closing costs: $6,000
Monthly savings: $200/month
Break-even: $6,000 ÷ $200 = 30 months (2.5 years)
If you stay 5+ years: Great deal!
If you move in 2 years: You lose money.
When Should You Refinance?
✓ Good Reasons to Refinance
- • Rate drops 0.5-1%+ from your current loan
- • Plan to stay past break-even point
- • Switch from ARM to fixed rate
- • Remove PMI (at 20%+ equity)
- • Shorten term (30 → 15 years)
✗ Think Twice
- • Moving within 2-3 years
- • Rate only 0.25% lower
- • Restarting 30-year clock (see below)
- • Cash-out to fund lifestyle spending
- • Credit score has dropped since original loan
Typical Refinance Closing Costs
Expect to pay 2-5% of your loan amount. Here's the breakdown for a $300,000 refinance:
| Cost Type | Typical Range | Example Amount |
|---|---|---|
| Loan origination fee | 0.5-1% | $1,500-$3,000 |
| Appraisal | $300-$600 | $450 |
| Title insurance | $700-$2,000 | $1,200 |
| Attorney/closing fees | $500-$1,500 | $800 |
| Total | 2-5% | $4,000-$8,000 |
⚠️ The "Restart the Clock" Trap
Be careful when refinancing into a new 30-year mortgage.
If you've already paid 10 years on your current loan, refinancing into a new 30-year means paying for 40 years total. Your monthly payment drops, but you pay interest for an extra decade.
Solution: If refinancing, consider a 15-20 year term to avoid resetting the clock.
Frequently Asked Questions
Can I roll closing costs into the loan?
Yes, most lenders offer "no-closing-cost refinance" by adding costs to your loan balance or accepting a slightly higher rate. But you still pay—just over time with interest. Compare both options.
Does refinancing hurt my credit score?
A hard credit inquiry may drop your score 5-10 points temporarily. Multiple mortgage inquiries within 14-45 days count as one. Your score typically recovers within a few months.
How many times can I refinance?
There's no legal limit... but each refi costs 2-5% in closing costs. Most people refinance 1-3 times over home ownership. Always run the break-even math before deciding.