When does refinancing actually make sense?

Refinancing replaces your current mortgage with a new one — to lower your payment, shorten your term, move off an ARM, or tap equity. It has costs, so the question is always whether the benefit outweighs them.

The break-even rule of thumb

Add up the new loan's closing costs, then divide by your monthly savings. That's your break-even point in months. Staying well past it? A refinance often makes sense.

Good reasons to refinance

• Rates dropped meaningfully since you closed.
• You want to shorten your term (30 → 15 years).
• You're moving off an ARM to a fixed rate.
• You want to consolidate higher-interest debt with a cash-out refinance.

Run it before you commit

Use our refinance calculator, then we'll give you a no-obligation analysis with real numbers. Refinancing may increase the total cost over the life of the loan; we'll lay that out honestly.

Get Pre-Approved ← Back to articles