Will a refinance actually pay for itself?
A lower rate is only half the story. A refinance has real costs, and stretching the loan back out can quietly add interest even while the payment drops. This shows your break-even point and the honest lifetime comparison — both numbers, not just the one that looks good.
Refinancing is often a genuinely good move — a lower rate, a shorter term so you own the home sooner, dropping mortgage insurance, or pulling cash out. But the lower payment alone doesn’t tell you whether it’s the right one. Two things do: how long the monthly savings take to earn back the closing costs — the break-even — and what resetting the clock does to your total interest, which can climb even at a lower rate if you stretch the term back out. Neither is a reason not to refinance; they’re the math that tells you which version is worth doing. Sometimes that’s a shorter term. In a higher-rate market it’s often a no-cost structure, so you’re not paying to buy down a rate you may refinance again when rates fall. I built this to put both numbers in front of you honestly, so the choice fits your goal and your timeline — not just the headline.
— Matt Mergo · NMLS #563819Or talk it through first. Whether you will still hold this loan past the break-even, and whether a lender credit changes the cost side altogether — neither of which a calculator can see. Text · Call · Email. It’s free, and there’s no pitch at the end of it.
This calculator is an educational estimate, not a loan offer. It compares principal and interest only and assumes closing costs are paid separately (not rolled into the loan). “Interest left” compares remaining interest on your current payoff against the full new loan. It does not account for taxes, insurance, PMI, the time value of money, or tax effects. Actual savings and costs depend on current pricing and your specific scenario. Forest Hills Mortgage · Matt Mergo, NMLS #563819. Equal Housing Opportunity.