Updated 2026
Find Your Refinance Break-Even Point in Seconds
Calculate exactly when your closing costs pay off and how much you'll save over your loan's lifetime.
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| Name | Typical Rate ↕ | Closing Costs ↕ | Processing Speed ↕ | Service Quality ↕ | Overall Value ↕ | |
|---|---|---|---|---|---|---|
| Fastest Processing Rocket Mortgage | 6.75%-7.25% | $2,500-$4,000 | ★★★★★ 5/5 | ★★★★★ 5/5 | ★★★★☆ 4/5 | |
| Lowest Fees Better.com | 6.65%-7.15% | $1,500-$2,800 | ★★★★☆ 4/5 | ★★★★☆ 4/5 | ★★★★★ 5/5 | |
| Best for Cash-Out LoanDepot | 6.80%-7.35% | $2,800-$4,500 | ★★★☆☆ 3/5 | ★★★★☆ 4/5 | ★★★☆☆ 3/5 | |
| No Origination Fees SoFi | 6.70%-7.20% | $1,800-$3,200 | ★★★★☆ 4/5 | ★★★★★ 5/5 | ★★★★★ 5/5 | |
| Best Rates Local Credit Union | 6.50%-6.95% | $2,000-$3,500 | ★★☆☆☆ 2/5 | ★★★☆☆ 3/5 | ★★★★☆ 4/5 |
Our Verdict: For most homeowners seeking to refinance, Better.com and SoFi offer the best combination of competitive rates and low closing costs, helping you reach break-even faster (typically 18-24 months). If you need cash-out refinancing or have complex income situations, LoanDepot provides more flexible options. Local credit unions consistently offer the lowest rates (often 0.15%-0.25% below national lenders) but require longer processing times. For quick closings within 21 days, Rocket Mortgage excels despite slightly higher costs. Use our calculator to input your specific scenario and determine which lender's combination of rate reduction and fees will maximize your long-term savings.
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Assumptions
- Fixed interest rate for the full loan term
- No additional fees or closing costs included
- Monthly compounding frequency
- Payments begin one month after loan origination
Methodology
Calculator uses standard amortization formula with 2026 market rates. Actual payments may vary based on credit score, fees, and lender terms. Consult a financial professional for personalized advice.
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Frequently Asked Questions
How much does it cost to refinance a mortgage?
Typical refinancing closing costs range from $2,500 to $5,000 for most homeowners, averaging about 2-3% of your loan amount. For a $300,000 mortgage, expect to pay around $6,000-$9,000 in fees including appraisal ($400-$600), origination fees (0.5-1% of loan), title insurance ($1,000-$2,000), and credit report fees ($25-$50).
How long does it take to break even on a refinance?
Most homeowners break even on refinancing costs within 2-4 years, depending on monthly savings versus closing costs paid. If you save $200/month and paid $4,800 in closing costs, your break-even point is 24 months, meaning you should plan to stay in your home at least that long to benefit financially.
Is it worth refinancing for 1% lower rate?
Refinancing for a 1% rate reduction typically saves $150-$200 per month on a $300,000 mortgage, totaling $54,000-$72,000 over a 30-year term. With average closing costs of $6,000-$9,000, you'd break even in 3-5 years, making it worthwhile if you plan to stay in your home beyond that timeframe.
Should I refinance to a 15-year or 30-year mortgage?
A 15-year mortgage typically has rates 0.5-0.75% lower than 30-year loans but requires payments roughly 50% higher. A $300,000 loan at 6% costs $1,799/month for 30 years versus $2,533/month for 15 years. The 15-year option saves approximately $184,000 in total interest but requires an extra $734 monthly, so choose based on whether you can afford the higher payment.
How much can I save by refinancing my mortgage?
Reducing your rate from 7% to 6% on a $300,000 mortgage saves approximately $200 per month and $72,000 over 30 years. Actual savings depend on your current rate, new rate, loan balance, and remaining term. A 1.5% rate drop can save $300-$350 monthly on the same loan amount.
When does refinancing not make sense?
Refinancing typically doesn't make sense if you plan to move within 2-3 years, have less than 10 years remaining on your current mortgage, or can only reduce your rate by 0.5% or less. Also, if you've already paid 10+ years on a 30-year mortgage, restarting the clock means paying significantly more interest over the life of the loan despite lower monthly payments.
Can I refinance with no closing costs?
No-closing-cost refinances exist but aren't truly free. Lenders charge a higher interest rate (typically 0.25-0.5% more) to cover the $2,500-$5,000 in fees. This means paying an extra $40-$85 monthly on a $300,000 loan, which over 30 years costs $14,400-$30,600 more than paying closing costs upfront.
Sources & References
- [1]Consumer Credit Outstanding ↗Federal ReserveRetrieved 2026-01Total consumer credit and revolving debt data
- [2]Quarterly Report on Household Debt ↗Federal Reserve Bank of New YorkRetrieved 2026-01Credit card balances and delinquency rates
- [3]Consumer Expenditure Surveys ↗Bureau of Labor StatisticsRetrieved 2026-01Average household spending patterns