Compare your current loan's remaining balance, rate, and term against a new refinance offer — see the monthly savings, interest difference, and how many months it takes to break even on closing costs.
Break-even months = closing costs ÷ monthly savings. If refinancing saves you $200/month and costs $4,000 in closing costs, you break even in 20 months — refinancing is worth it financially if you plan to stay in the home (or keep the loan) longer than that.
Not necessarily — resetting to a new 30-year term after you've already paid down several years of your current loan can lower your monthly payment while increasing total interest paid, since you restart the amortization clock at year zero. Always compare total remaining interest, not just the monthly payment, using the figures above.
Typically 2–5% of the loan amount, covering appraisal, origination fees, title insurance, and other lender and third-party charges. Get an actual Loan Estimate from your lender rather than assuming a flat percentage — costs vary meaningfully by lender and region.
Worked example: a $280,000 balance at 6.5% with 25 years remaining costs about $1,891/month. Refinancing into a new 30-year loan at 5.5% costs about $1,590/month — a $301/month saving. Against $4,000 in closing costs, that's a break-even of about 14 months.
Shopping for a new home loan instead? Use the Mortgage Calculator.