Refinancing
When does refinancing actually make sense?
Refinancing can lower your payment, shorten your term, or tap equity — but only if the math works. Here's how to know.
Refinancing replaces your current mortgage with a new one — ideally on better terms. It can be a great move or a wash, and the difference comes down to a simple break-even calculation.
The reasons people refinance
The three big ones: lower your rate and monthly payment, shorten your term to pay off the home faster, or tap your equity with a cash-out refinance for things like renovations or consolidating higher-interest debt.
Do the break-even math
A refinance has closing costs, so the question is how long it takes your monthly savings to pay those costs back. If you'll save $200 a month and the refinance costs $4,000, you break even in 20 months. Stay in the home past that point and the rest is savings. Plan to move sooner and it may not be worth it.
Timing and rates
You don't need to wait for a perfect rate — you need a rate low enough that your break-even makes sense for how long you'll keep the home. Our refinance calculator does the math in seconds, and a loan officer can confirm whether now is your moment.