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 (months)
• Planned Stay — How long you plan to stay in the home (months)

Explanation: If you'll stay in the home longer than it takes to recover refinancing costs, then refinancing is worthwhile.

3. Importance of Break-Even Analysis

Details: This calculation helps avoid refinancing when you won't stay in the home long enough to benefit from the lower payments.

4. Using the Calculator

Tips: Enter both values in months. The break-even period is typically calculated as total refinancing costs divided by monthly savings.

5. Frequently Asked Questions (FAQ)

Q1: What's included in refinancing costs?
A: Typically includes application fees, appraisal fees, title insurance, and other closing costs.

Q2: How do I calculate break-even months?
A: Divide total refinancing costs by your monthly payment savings after refinancing.

Q3: What if my planned stay is exactly at break-even?
A: The calculator shows "no" since you wouldn't actually realize any net savings.

Q4: Should I consider other factors beyond break-even?
A: Yes, also consider changes in interest rate risk, loan terms, and your financial goals.

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