Refinancing Decision
Evaluate rates, fees, remaining term, payment changes, and total cost to determine whether refinancing makes financial sense.
What Refinancing Decision gets you.
By the end of this upgrade you will have a documented breakeven and total-cost analysis comparing your current loan to a refinance offer, resulting in a clear proceed-or-decline decision.
- Current loan statement showing balance, rate, and remaining term
- A specific refinance offer with rate, term, and fees
- How long you plan to keep the loan or asset
Run the upgrade.
- 01
Record current loan terms
Note your current balance, interest rate, remaining term, and monthly payment exactly as shown on the latest statement.
- 02
Record the refinance offer terms
Note the new rate, term, monthly payment, and every closing or origination fee disclosed in the offer.
- 03
Calculate the new monthly payment difference
Subtract the new monthly payment from the current monthly payment to find your monthly savings or increase.
Monthly difference = current payment - new payment
- 04
Calculate the breakeven period
Divide total refinance closing costs by the monthly savings to find how many months it takes to recoup the cost of refinancing.
Breakeven months = total closing costs / monthly savings
- 05
Compare breakeven to your time horizon
Check whether you plan to keep the loan or asset longer than the breakeven period; if not, refinancing likely costs more than it saves.
- 06
Calculate total cost over the full term
Compare total remaining cost (all future payments plus any fees) of staying versus refinancing to confirm which is cheaper overall.
- 07
Document the decision
Write down the breakeven period, total cost comparison, and final decision to refinance or keep the current loan.
- Current and offered loan terms are both documented
- Monthly payment difference and breakeven period are calculated
- Breakeven period is compared against your planned time horizon
- A final documented decision exists with supporting numbers
Revisit when
- Market rates drop significantly below your current rate
- Your credit profile improves enough to qualify for a better rate
Refinancing terms, fees, and eligibility vary by lender and change over time; confirm final numbers directly with the lender before committing.