"Should I refinance my mortgage?" isn't really a rate question — it's a timing question. A lower rate only helps if you stay in the loan long enough to recoup what refinancing costs.
Mortgage refinance break even calculator, why savings alone mislead
On a $300,000 balance with 25 years (300 months) remaining at 7.2%, refinancing into a new 30-year loan at 6.0% drops the payment from $2,158.77 to $1,798.65 — a $360.11 monthly savings. That sounds like an easy yes. But with $5,000 in closing costs, it actually takes 13.9 months of savings just to break even.
Refinance savings calculator, the number that actually matters
If you're confident you'll stay in the home (or keep the loan) past the break-even point, the refinance pays off — every month after that is real savings. If you might sell or refinance again before then, the closing costs may never be fully recovered.
Refinance closing costs calculator, why resetting the term matters
Watch out for one trap: resetting to a fresh 30-year term after you've already paid down years on your current loan extends how long you're paying interest, even at a lower rate. This tool compares your actual remaining months against the real new term, not a generic assumption.
