Is it worth it to refinance?

Find your break-even month, compare total savings, and see whether locking in today beats waiting for rates to fall further.

Refinancing only makes sense if you stay long enough to recover the upfront costs through lower monthly payments. Enter your current mortgage, the new rate you've been quoted, and how long you plan to stay — this calculator finds your exact break-even point and shows you total savings at 3, 5, and 10 years. Canadian homeowners get IRD penalty calculations; US homeowners get discount point and PMI analysis.

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Step 1 of 3

Your current mortgage

Tell us about the mortgage you want to refinance.

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yrs
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Your new mortgage

Enter the terms of the refinance you're considering.

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Closing Costs
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Typical US range: 2–4%
Your loan balance increases, but no cash is needed upfront.
Discount Points (optional)
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Your plans

These details refine your break-even and savings analysis.

Affects total savings projection 7 years
1 yr5 yrs10 yrs15 yrs
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Rate Forecast (optional)

Your Refinance Analysis

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Break-even in 18 months
You plan to stay 7 years — refinancing saves you money 4.5 years early.
Break-even Stay: 7 yrs

Net Savings Over Time

3 Years
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5 Years
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At Sale
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10 Years
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Net of all upfront costs. Negative means you haven't recouped costs yet.

Monthly Payment Comparison

Item Current New Change

Upfront Costs

Pay Upfront vs. Roll Into Loan

Rolling costs into the loan eliminates upfront cash but means you pay interest on those costs for the life of the loan.

How this is calculated

Break-even

Break-even months = total upfront costs ÷ monthly savings. Monthly savings = (current payment + PMI) − new payment. Upfront costs include closing costs, discount points (US), and any prepayment penalty (CA).

Net savings

Net savings at N months = (monthly savings × N) − total upfront costs. A negative value means costs have not yet been recovered.

Canadian IRD penalty (fixed-rate)

IRD = balance × max(0, currentRate − lenderRate) / 100 × monthsRemaining / 12

Canadian 3-month interest penalty (variable)

Penalty = balance × currentRate / 100 / 12 × 3

Wait vs. lock

Compares locking in today's rate against waiting for a projected rate drop. Calculates the monthly savings you forfeit while waiting, the extra monthly savings the lower future rate would provide, and how long it takes to recoup the lost months.

No-cost refi

When costs are rolled into the loan, the new balance = current balance + closing costs. The higher balance produces a slightly higher payment than the pay-upfront scenario, but requires no cash at closing.

Frequently Asked Questions

What is a refinance break-even point?
The break-even point is the number of months it takes for your cumulative monthly savings to exceed the total upfront costs of refinancing. If your break-even is 24 months and you plan to stay 5+ years, refinancing makes strong financial sense. If you expect to move or sell before you hit break-even, you'll lose money on the transaction.
How much does it cost to refinance a mortgage?
In the US, refinancing typically costs 2–4% of the loan amount in closing costs — on a $400,000 loan, that's $8,000–$16,000. In Canada, costs are lower at 1–2%, but you may also face a prepayment penalty if you're breaking a fixed-rate mortgage mid-term. That penalty alone can easily reach $10,000–$20,000 on a larger mortgage.
What is the Canadian IRD penalty and how is it calculated?
The Interest Rate Differential (IRD) penalty is what Canadian banks charge when you break a fixed-rate mortgage before renewal. It equals: balance × max(0, your rate − lender's posted rate) / 100 × months remaining / 12. The lender's posted rate is their current advertised rate for a term matching your remaining time. Variable-rate mortgages use a simpler penalty: 3 months of interest.
Should I refinance now or wait for rates to fall further?
It depends on how much further rates might drop, when it happens, and how long you plan to stay. If you refinance now and rates drop again in 6 months, you could refinance a second time — but you pay closing costs twice. Our wait vs. lock section models both scenarios: it calculates the monthly savings you sacrifice while waiting, the extra savings a lower future rate provides, and whether waiting pays off within your planned stay.
What is a no-closing-cost refinance and when does it make sense?
A no-closing-cost refinance rolls the closing costs into the loan balance or is offset by a slightly higher rate. There's no cash needed at closing, so the break-even is effectively immediate. However, your monthly payment will be slightly higher than if you paid costs upfront, and you'll pay interest on those costs for the life of the loan. It makes sense when you're uncertain about how long you'll stay, or when you simply don't have cash available for closing.