Testing a refinance against time: breakeven, term resets and total cost
How long you will stay
On the bench
Breakeven only helps if you keep the loan longer than the breakeven period. Moves, job changes, a future refinance or selling to buy a bigger home all end the loan early. Estimate a realistic range rather than a single date, and favor options that still work at the short end of that range.
Last reviewed against the primary sources listed below.
Questions to ask yourself
- Could work or family move you within a few years?
- Would you refinance again if conditions change?
- Are you planning to sell or rent the home?
Breakeven questions
What if I sell before breakeven?
You will have paid more in costs than the refinance saved.