Refinance
What refinancing actually costs
A lower rate doesn't mean a free refinance. Closing costs are real — here's what's typically in them, and the one number that tells you whether they're worth paying.
What's usually in closing costs
The total varies by lender, loan size, and state — we'll get you a real number before you commit to anything, not an estimate you have to guess at. But it's typically some mix of these five things:
- Origination & lender fees
- What the lender charges to underwrite and fund the new loan.
- Appraisal
- An independent valuation of the home, required by most lenders.
- Title search & insurance
- Confirms clean ownership and protects against claims on the property.
- Recording fees
- What your county charges to file the new loan on public record.
- Prepaid escrow setup
- Seeds your new tax and insurance escrow account — not a fee, but cash due at closing.
The break-even formula
Divide your closing costs by your monthly savings. That's how many months until the refinance has paid for itself — every month after that is money you keep. Stay in the home past that point and the savings are real; move or refinance again before then and they're not.
For example: $6,000 in closing costs, saving $150 a month, breaks even in about 40 months — a little over 3.3 years.
It's not just the monthly number
Two refinances can have the same monthly savings and very different break-even points, depending on the closing costs. And resetting your loan term matters too — see what resets when you refinance for how a fresh 30-year clock can offset the savings you're chasing.
Find your actual break-even
The calculator does this math live as you adjust your numbers.