Refinance Calculator

First, the break-even point: closing costs divided by the monthly savings. If refinancing costs $6,000 and saves $250 a month, you break even in 24 months — it only makes sense if you'll keep the loan (and the house) longer than that. Second, the total cost until payoff: a lower payment over a *longer* term can still cost more in the end.

Refinancing 25 remaining years into a new 30-year loan restarts the clock: the payment drops both because the rate is lower *and* because you're stretching the debt over more years — and those extra years accrue interest. To capture the rate without the stretch, consider matching the remaining term (e.g., a 20- or 25-year refi) or keep paying the old payment amount on the new loan.

The classic triggers: your rate is meaningfully above market (a common rule of thumb is at least 0.5-1 point lower), your credit improved since the original loan, you want to drop PMI after building equity, or you're switching from an adjustable to a fixed rate. Get quotes from more than one lender — closing costs and rates vary widely for the same borrower.