Refinancing typically makes sense when you can lower your rate by at least 0.5–1%, plan to stay in your home long enough to recoup closing costs (the break-even point), and your credit score qualifies you for better terms. This calculator shows your exact break-even month — if you'll stay past that date, refinancing saves you money. Not sure what you can afford? Our affordability calculator can help.

The break-even point is the number of months it takes for your monthly savings to exceed the upfront closing costs. For example, if refinancing costs $4,000 and saves you $200/month, your break-even is 20 months. After that point, every month is pure savings. This is the single most important number in a refinance decision. Our 2026 refinance guide walks through break-even scenarios in detail.

Refinance closing costs typically range from 2–5% of the loan amount, or $3,000–$6,000 on a typical mortgage. These include application fees, appraisal, title insurance, and origination fees. Some lenders offer 'no-closing-cost' refinances, but they compensate by charging a slightly higher rate. You can also roll closing costs into the loan balance — this calculator lets you model both scenarios.

Most conventional lenders require a credit score of 620+ for refinancing, with the best rates available at 740+. If your score is below 620, you may still qualify for FHA Streamline refinancing (if you have an existing FHA loan) or VA Interest Rate Reduction Refinance Loan (IRRRL) for VA loans. These government-backed options have more lenient credit requirements.

A rate-and-term refinance replaces your existing mortgage with a new one at a different rate or term — the loan amount stays roughly the same. A cash-out refinance lets you borrow more than you owe and take the difference in cash, using your home equity. Cash-out refinances typically have slightly higher rates. This calculator models rate-and-term refinancing.

Lock your rate as soon as you've decided to move forward with refinancing. Rate locks typically last 30–60 days, giving you time to close. Don't try to time the market — rates can move unpredictably. If rates drop significantly after you lock, some lenders offer a float-down option. Use the Rate Target tab in this calculator to find the exact rate that makes refinancing worthwhile for your situation.

It depends on your loan balance, closing costs, and how long you plan to stay in your home. A 0.5% rate drop on a $300,000 loan saves roughly $90/month. With $4,000 in closing costs, your break-even point is about 44 months. If you plan to stay longer than that, the refinance pays off. Use the calculator's break-even tab to see your exact numbers based on your loan details. Read our complete refinance guide for more scenarios.