The break-even point is how long it takes for your monthly savings to cover the cost of refinancing. If you plan to stay in your home past this point, refinancing likely makes sense.
Your monthly payment drops by $223, but it takes 27 months to break even. Only proceed if you're staying long-term.
Estimates based on your inputs. Actual results may vary. Terms →
By refinancing to a 6.5% rate on a 25-year term, you save $223 per month. It will take 27 months to recover your $6,000 in closing costs. Over the life of the loans, you will save a net total of $60,973.
Rates shown are for illustration. Contact your lender for a formal quote.
Refinancing costs money upfront (closing costs: typically $3,000–8,000). Your monthly savings from a lower rate gradually recover this cost.
Break-even = closing costs ÷ monthly savings
Example: $6,000 closing costs ÷ $200/month savings = 30 months to break even.
If you plan to stay longer than 30 months, refinancing makes financial sense.
Estimates based on your inputs. Actual results may vary. Terms →