Mortgage refinancing. Look beyond the rate.

START WITH UNDERSTANDING

The details matter.

A new mortgage brings new terms. Compare upfront costs and ongoing payments, and look at total interest over the time you expect to keep the loan. A lower payment alone does not tell the whole story.

Refinancing can increase total interest if repayment is extended. Savings depend on your existing loan, the new terms, and closing costs.

Learn more: Consumer Financial Protection Bureau ↗

Three questions
worth asking.

1. Are you focused on payment, loan term, or accessing equity?
2. How long do you expect to keep the home and the loan?
3. How do the new costs compare with keeping your current mortgage?

What are you trying to improve?

Lowering a payment, shortening a term and accessing equity are different goals. Compare your current balance and remaining term with the proposed loan, including fees financed into the new balance.

Use a break-even estimate carefully.

For a simple payment-saving comparison, divide upfront refinance costs by monthly savings. Hypothetically, $4,000 in costs divided by $200 in monthly savings is 20 months. This shortcut does not measure total interest, changes in principal repayment, taxes or the cost of extending a loan term.

Ask for a side-by-side comparison over the period you expect to keep the loan. A cash-out refinance also adds borrowing; it should not be judged as if the balances were identical.

When a second loan may be worth comparing

If your goal is to access equity, compare refinancing the entire mortgage with keeping it and adding a second loan. Review both the combined payment and the cost over time.

Compare three ways to access equity →