1. What Is Refinancing Worth Calculation?

The refinancing worth calculation determines whether refinancing makes financial sense by comparing the break-even period (time to recover costs) with your planned stay in the home.

2. How Does the Calculator Work?

The calculator uses the simple comparison:

Where:

• Break-Even Months — Time needed to recover refinancing costs through monthly savings
• Planned Stay — How long you expect to stay in the home after refinancing

Explanation: Refinancing only makes sense if you'll stay in the home long enough to recover the costs through savings.

3. Importance of Break-Even Analysis

Details: This calculation helps avoid refinancing when you won't stay long enough to benefit, ensuring you make financially sound decisions about mortgage changes.

4. Using the Calculator

Tips: Enter your calculated break-even period (from closing costs divided by monthly savings) and your planned duration in the home. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What exactly is break-even months?
A: This is the number of months needed for your monthly savings to equal the upfront costs of refinancing.

Q2: How do I calculate my break-even period?
A: Divide total refinancing costs by your monthly payment savings. For example, $3,000 in costs saving $100/month = 30 month break-even.

Q3: Should I refinance if I'm moving soon?
A: Only if your break-even period is shorter than your planned stay - otherwise you won't recover the costs.

Q4: Are there other factors to consider?
A: Yes - consider interest rate differences, loan term changes, and potential prepayment penalties.

Q5: Does this apply to all types of refinancing?
A: Primarily applies to rate-and-term refinances where the goal is payment reduction.