Simulation

Should I Refinance My Mortgage?

Refinancing a $250,000 balance from 7% to 5.5% over 25 years cuts the payment by about $210 a month. With $4,000 in closing costs, you break even in roughly 19 months. If you stay longer than that, refinancing saves money — about $8,600 over five years. The decision rule is simple: if your planned stay beats the breakeven, refinance; if you move sooner, you lose the fee.

Results

Visualization

RateFig provides estimates for educational purposes only. Mortgage and loan figures depend on your credit, fees, points, and individual lender terms. This is not financial advice. Confirm every number with a qualified loan officer before making a decision.

How It Works

Monthly savings is the drop in payment when the balance is re-amortized at the new rate over the remaining term. Breakeven months equal the closing fee divided by that monthly saving. Cumulative net savings starts at negative the fee and climbs by the monthly saving each month; the point where the line crosses zero is the breakeven. Total savings over your stay is the monthly saving times the months you remain. This assumes you keep the same remaining term and do not take cash out.

What Should You Do?

Only count savings you actually keep — if you roll the fee into the new loan or reset to a fresh 30-year term, you may pay more interest long term despite a lower payment. Get real closing-cost quotes; the advertised no-cost refinance usually just trades a higher rate for the fee. If you expect to move before breakeven, skip it. If you stay well past breakeven and the new rate is clearly lower, refinancing is usually a good move.

Frequently Asked Questions

What if I reset to a 30-year term?

Your payment drops more but you pay interest longer. Compare total interest, not just the payment, against your breakeven.

Are no-closing-cost refinances free?

No — the lender usually charges a higher rate instead. Run the breakeven on that higher rate to see if it still pays.

Should I take cash out?

Cash-out raises the balance and often the rate; this tool assumes a rate-and-term refinance with no cash out.

How accurate is breakeven?

It is exact for the inputs. Accuracy depends on your real fee, new rate, and how long you actually stay.

What if savings are tiny?

If monthly savings barely exceed the fee over your stay, the hassle and credit pull may not be worth it.

Does credit score matter?

Yes — your new rate depends on it. Pull your score and shop within a short window to limit credit-impact.