When Does a Refinance Actually Make Sense?
The break-even framework and common mistakes.
Published: Last updated:
A refinance makes sense when the monthly savings recoup the closing costs within a timeframe shorter than how long you plan to keep the loan.
Break-even = total closing costs ÷ monthly savings. If break-even is 24 months and you plan to keep the home 5+ years, you win.
Cash-out refinances are different: you're trading a lower first-lien rate for accessing equity. Compare to a HELOC or second lien first.
Talk to a NEXA loan officer
This guide is written by Renato Rodic, a NEXA Lending loan officer. See the contact page to reach him about your specific scenario.