Should I refinance?
Monthly savings, the month you recover the closing costs, and the interest you still owe either way.
Your inputsNothing is saved or sent. Interest only compared; taxes and insurance are the same on both loans and left out.
How to read it
The simple break even is closing costs divided by the monthly saving. It tells you how many months you must keep the new loan before the refinance has paid for itself. If you expect to move or refinance again before that month, the refinance loses money even though the payment is lower.
Watch the second table. A new 30 year loan on a balance you have been paying for years resets the clock, so the monthly payment can fall while the total interest you will pay goes up. The interest comparison over your expected holding period is the honest number.
An illustration, not a loan offer, a rate quote or advice. Your numbers depend on your application, the property and the lender. See disclaimers.
Questions people ask
What is a good break even on a refinance?
Under 24 months is usually clear. 24 to 48 months depends on how sure you are about staying. Over 48 months rarely pays unless the rate drop is large or you are escaping mortgage insurance or an adjustable rate.
Should I roll closing costs into the loan?
Rolling them in keeps cash in your pocket but you pay interest on the costs for the life of the loan. The calculator shows the effect either way.