🏠 Should I refinance my mortgage?

Deciding whether to refinance your mortgage comes down to a simple math problem: will your monthly savings pay for the upfront closing costs before you move? This calculator compares your current mortgage against a new rate to reveal your true break-even point and total net savings over your planned stay.

Your current loan details form the baseline for comparison. We calculate your principal and interest, simplifying away taxes and insurance in escrow since those remain constant.

We also focus strictly on a rate-and-term refinance, ignoring cash-out refinances or the option to extend or shorten your term.

Freddie Mac notes that you pay closing costs like those you paid when you first bought the home, typically 3% to 6% of your loan principal. These cover origination fees, appraisal, title services, and recording costs.

Freddie Mac warns that a "no-cost refinance" is not free. Lenders usually charge a higher interest rate and roll the closing costs into the balance. This increases your total costs over the life of the loan.

The break-even month is the single number that matters most. Refinancing wins when you have a large rate drop, many years left on the loan, and a long time before you move.

Staying put wins if you have a small rate drop, a short remaining term, or you are moving soon. Adjust your planned years to see how it changes the verdict.

For further related reading, check out:

• Understanding the costs of refinancing
• Planning to refinance
• Refinancing your mortgage