When Is Refinancing Worth It?

Refinancing may be worth considering when the monthly savings are large enough to recover closing costs within the time you expect to keep the loan.

Common reasons to refinance

Borrowers often refinance to lower the payment, shorten the loan term, switch loan types, or remove mortgage insurance.

Watch the break-even point

If closing costs are $4,500 and the new loan saves $150 per month, the simple break-even point is about 30 months.

Look past the monthly payment

A lower monthly payment can still cost more over time if you restart a long term. Compare monthly savings, closing costs, remaining years, and total interest.

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