Find out if refinancing your mortgage makes financial sense
| Current | New | |
|---|---|---|
| Monthly Payment | $2,017 | $1,679 |
| Monthly Savings | $338 | |
You'll break even in 42 months and save $32,160 over your planned stay.
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Start free trialRefinancing typically makes sense when you can lower your interest rate by at least 0.5-1%, plan to stay in your home longer than the break-even period, and the monthly savings justify the closing costs. You should also consider your remaining loan term and overall financial goals.
The break-even point is when your total monthly savings equal your refinancing costs. Calculate it by dividing your closing costs by your monthly savings. For example, if closing costs are $6,000 and you save $200/month, break-even is 30 months.
Refinance closing costs typically range from 2-5% of the loan amount. This includes application fees, appraisal, title insurance, origination fees, and other charges. On a $300,000 loan, expect to pay $6,000-$15,000 in closing costs.
Rolling closing costs into your loan means you don't pay out of pocket, but you'll pay interest on those costs over the life of the loan. This increases your total interest paid. It may make sense if you don't have cash available, but paying upfront is usually more cost-effective.
Refinancing to a shorter term (e.g., 30 to 15 years) typically means higher monthly payments but significant interest savings. It makes sense if you can comfortably afford the higher payment and want to build equity faster and pay off your home sooner.