01/13/2026
When the rates start moving , we start thinking refinance options. This is how I look at and break down the numbers
So, here’s a quick refresher on calculating the break-even point for the monthly savings from a refinance to offset the total cost of doing the refinance.
“Is it worth it to refinance?”
“How long do I need to stay in the house for this to make sense?”
EXAMPLE/HOW TO CALCULATE:
Let’s say a borrower is considering refinancing to lower their monthly payment.
Current rate: 6.875%
New rate after refinance: 6.125%
Loan balance: $400,000
Remaining term: 27 years
New loan term: 30 years
Monthly payment savings: $305/month
Total refinance closing costs: $6,850 (including lender fees, title, appraisal, etc.)
Break-Even = $6,850 ÷ $305 = ~22.5 months
Bottom Line: If the borrower plans to stay in the home for 2 years or longer, this refinance likely makes financial sense.
Let's talk about It !
If you have your current mortgage statement that helps a lot so I can also review your mortgage escrow account!
