Find out how many months until refinancing your mortgage actually pays off — and whether it's worth it for your timeline.
Refinancing isn't free — you'll pay closing costs (typically 2–5% of the loan amount) for the new loan. The break-even point is how many months of monthly savings it takes to recoup those closing costs. After that point, every additional month you stay in the home is pure savings.
If you plan to move or sell before reaching break-even, refinancing likely isn't worth it — you'd pay the closing costs but never fully recoup them.
The "stretch the term" trap: Refinancing to a new 30-year loan after already paying down your current 30-year loan for several years resets the clock — even at a lower rate, you may pay more total interest over time because you're financing for longer. Consider a shorter-term refinance (15 or 20-year) if you want lower rate AND less lifetime interest.
Refinancing is most clearly worth it when you can drop your rate by 0.75% or more, plan to stay in the home well beyond your break-even point, and aren't planning to sell or move within the next 2-3 years. The general rule of thumb — refinance if rates drop at least 1% — is a reasonable starting heuristic, though this calculator gives you the precise math for your situation.