Rate drops, PMI removal, break-even math — how to tell whether refinancing truly pays for you.
Refinancing only pays when the math pays — and the math has three inputs: your current rate versus today's rate, your closing costs, and how long you'll keep the loan. Divide costs by monthly savings and you get your break-even month. Stay past it, and every month after is profit.
As a rule of thumb, a rate drop of 0.75 to 1 percentage point justifies a closer look, especially if you'll stay put for at least three to five years. But rate isn't the only trigger: removing private mortgage insurance after appreciation, switching from an adjustable rate to fixed stability, or shortening a 30-year term to 15 can each pay off without a dramatic rate move.
Watch out for quotes that roll heavy fees into the balance while advertising a lower payment — the payment drops, but so does your equity. We show every fee upfront and tell you plainly when waiting beats refinancing. Send us your current rate and balance for a free break-even estimate.