Compare your current mortgage to a new loan and find out how long it takes to break even on closing costs. See your potential monthly savings.
Refinancing replaces your current mortgage with a new one, ideally at a lower interest rate. The key question is whether your monthly savings will outweigh the closing costs before you sell or pay off the home.
Refinancing resets your amortization clock. If you're 10 years into a 30-year loan and refinance into another 30-year loan, you'll pay more interest overall — even at a lower rate.
Refinancing replaces your current mortgage with a new one, usually to get a lower interest rate, switch loan terms, or convert from an adjustable-rate to a fixed-rate loan.
The break-even point is how long it takes for your monthly savings to exceed your closing costs. If you plan to stay in the home past this point, refinancing generally makes financial sense.
A: Closing costs typically run 2% to 5% of the loan amount, covering appraisal, title, origination, and other fees.
A: Yes. If you're 10 years into a 30-year loan and refinance into another 30-year loan, you'll pay more total interest — even at a lower rate.
A: Generally 620+ for conventional refinancing, though the best rates go to borrowers with 740+.