Refinance Guide

Total the costs you will actually pay — origination, appraisal, title, recording, prepaid items that are not simply moved forward — and divide by the monthly payment saving. The result is the number of months you must keep the loan for the refinance to be free.

Rolling costs into the balance does not remove them. It converts them into interest you pay over the remaining term, which usually raises the true break-even rather than lowering it.

The classic case: a lower rate on a similar balance. Watch the term reset — dropping the rate while restarting a 30-year clock can lower the monthly payment and still increase lifetime interest.

Comparing total interest to maturity, not just the monthly payment, is the only fair comparison.

A cash-out refinance converts home equity into cash at mortgage rates, usually with a pricing add-on because the loan-to-value ratio rises. It is cheap money compared with unsecured debt and expensive compared with doing nothing, and it puts the house behind the borrowing.

Moving from 30 to 15 years typically buys a lower rate and a much lower lifetime interest bill, at a higher monthly payment. If the goal is only to pay less interest, making extra principal payments on the existing loan achieves much of it with no closing costs and no loss of flexibility.

If your equity has grown past the threshold, dropping mortgage insurance can be worth more than the rate change itself. On a conventional loan that may need only a new appraisal rather than a full refinance — worth checking before paying closing costs.

Published averages describe a well-qualified borrower. Your quote adjusts for credit score, loan-to-value, occupancy, property type and points purchased, using the public pricing grids lenders price from. Our rate pages show the benchmark series and the adjustments separately so the gap is visible.

Collect quotes within a short window so credit bureaus treat mortgage enquiries as a single event, and compare Loan Estimates line by line rather than comparing advertised rates. The cost of the loan lives in the fee page, not the headline.

If you may move before break-even, if the new loan pushes you back into mortgage insurance, or if the saving depends on stretching the term to make the payment look smaller, the refinance is usually a loss dressed as a gain.