Testing a refinance against time: breakeven, term resets and total cost
No-closing-cost refinances
On the bench
A no-closing-cost refinance usually covers costs with lender credits in exchange for a higher rate, or by adding costs to the balance. With little or nothing to recover, breakeven can be immediate, but the higher rate costs more each month you keep the loan. It tends to fit owners who expect to move or refinance again soon.
Last reviewed against the primary sources listed below.
Compare two quotes
- One with costs paid and a lower rate.
- One with lender credits and a higher rate.
- Compare both over the years you expect to stay.
Breakeven questions
Is a no-closing-cost refinance really free?
No. The costs are paid through a higher rate or a larger balance.