CalculateRealEstateROI

Financing

When does a rate-and-term refinance make sense?

When new rate is ≥0.75% lower OR you can drop PMI without resetting amortization too far.

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Direct answer

When new rate is ≥0.75% lower OR you can drop PMI without resetting amortization too far.

Expanded explanation

Use the breakeven months calc: closing cost ÷ monthly savings = months to recoup. Under 24 months is usually a yes.

Examples

  • $5k cost ÷ $250 savings = 20 mo breakeven.

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