The napkin math

One formula decides most refinances:

Break-even (months) = total refinance costs ÷ monthly savings.

Illustrative example: $6,000 in costs ÷ $175 saved per month ≈ 34 months. Planning to stay longer than 34 months? The refinance is working for you. Selling in two years? You'd be paying $6,000 to save $4,200.

That's it. Not "rates dropped 1%," not what your neighbor did. Your costs, your savings, your timeline.

Gotcha #1 — the term reset

Say you're six years into a 30-year loan and refinance into a fresh 30-year. Your payment drops — partly because of the better rate, and partly because you just stretched the remaining 24 years back out to 30. That second part isn't savings; it's borrowing longer. Two honest fixes: compare the total interest remaining on both paths, or refinance into a term that matches what you had left (a 25- or 20-year). Sometimes a 20-year refi has a nearly identical payment and quietly deletes four years of interest.

Gotcha #2 — rolling the costs into the loan

"No money out of pocket" doesn't mean no cost — it means the $6,000 now lives inside your loan balance, collecting interest for decades. Fine as a cash-flow choice, but the napkin math still applies: those rolled-in costs are still the numerator.

Gotcha #3 — the "no-cost" refinance

A no-cost refi is real, but the costs didn't vanish — they're priced in as a higher interest rate. That trade is actually smart if you might move or refinance again before break-even, and expensive if you're staying put for a decade. It's a timeline question, not a trick question — but only if you know that's the trade you're making.

The Florida line item people miss

Florida charges documentary stamp tax and intangible tax on the new mortgage when you refinance. Out-of-state calculators and national lender ads routinely leave these off, and they're not small. Our worksheet includes them, because a break-even that's missing a real cost isn't a break-even — it's a brochure.

Do it with sliders instead of a napkin

The refinance break-even calculator on this site runs this exact math with your real numbers — costs, savings, and how long you plan to stay. Or text us your current statement and the rate you've been quoted, and we'll tell you honestly if the math says wait. We'd rather lose a refi than have you pay for one that doesn't pay you back.