How Many Months to Break Even?

The real cost of refinancing is the closing costs. Determine how many months it will take to make up these costs from savings under the new loan.
Old Monthly Payment:

New Monthly Payment:

Closing Costs:

Refinancing an old home loan could mean lower monthly payments and perhaps changing from a variable rate to a fixed rate. If projected time in the house is short, the closing costs may consume any savings.

Also, if you plan to sell in a year or two, the variable rate mortgage with its initially lower rate may be more to your advantage. Assuming the mortgage amount is less than the aquisition debt limit (up to $1,000,000) and $100,000 in home equity loans, the interest paid deductible. Consider paying off other consumer debt first on which the interest payments are no longer deductible.

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