Testing a refinance against time: breakeven, term resets and total cost
Breakeven with points
On the bench
Points add upfront cost in exchange for a lower rate, so they lengthen the time before savings cover costs. Run the breakeven with and without points to see how long each takes and compare it with how long you expect to keep the loan.
Last reviewed against the primary sources listed below.
Run twice
- With points.
- Without points.
Breakeven questions
Do points make refinancing take longer to pay off?
Yes, they add upfront cost.
How do I compare?
Run the breakeven both ways.