Testing a refinance against time: breakeven, term resets and total cost
Rolled-in costs
On the bench
Adding closing costs to the new balance means you pay less at closing but borrow more, so you pay interest on the costs for the life of the loan. For breakeven, count rolled-in costs exactly as if you paid them in cash. They are still costs, and they also raise the new payment slightly.
Last reviewed against the primary sources listed below.
Where to see them
The Loan Estimate shows the loan amount and closing costs. Check whether costs are financed or paid at closing in the Calculating Cash to Close table.
Breakeven questions
Does rolling in closing costs change breakeven?
Breakeven still uses the full costs, and the larger balance adds interest over time.