Compare mortgage refinance options with the full cost in view

How mortgage refinancing works

Your new loan pays off your current mortgage and creates a new payment schedule. A rate-and-term refinance changes the interest rate, repayment period, or both without taking substantial cash from your equity.

Compare offers created on the same day and for the same loan details. Rates can move, and a quote with a lower rate may include higher upfront costs.

What to compare in each refinance offer

• Interest rate and annual percentage rate (APR)
• Loan term and projected monthly payment
• Discount points, lender fees, and third-party closing costs
• Cash needed at closing and whether costs are added to the balance
• Rate-lock period and estimated closing timeline
• Prepayment terms and servicing details

Calculate your break-even point

Divide the refinance closing costs by the estimated monthly savings. The result is the approximate number of months needed to recover those costs. If you expect to sell, move, or refinance again before then, the lower payment may not outweigh the upfront expense.

When a refinance may fit

• Your new total cost is lower over the period you expect to keep the loan
• You want a shorter term and can manage the payment
• You want to replace an adjustable rate with a fixed rate
• Your credit or equity position has improved since the original loan