Understanding Your Refinance Break-Even Point.
Refinancing your mortgage can help you lower monthly payments, shorten your loan term, or consolidate debt. However, to truly gauge the financial benefits of refinancing, it’s crucial to understand your break-even point.
Your refinance break-even point is the moment in time when the cost of refinancing is outweighed by the savings you will realize from your new loan terms.
Calculating your break-even point involves adding up all refinancing costs and dividing that total by the monthly savings from your new mortgage payment. For instance, if your one-time refinancing costs equal $3,000 but your refinance will reduce your monthly payment by $150, your break-even point would be 20 months into your new loan.
If you’re considering refinancing but want to make sure it’s the right choice, NIHFCU’s home loan specialists are here to help. Contact us today for personalized advice and support.
Rates, fees and terms as of April 28, 2024 and subject to change without notice
