Payment change
Does it fit your life? There's no magic 1% rate-drop rule: loan size, fees and how long you'll keep it decide the answer.
California mortgage refinance Worth it, or not yet?
We compare your current loan with real offers from several lenders: the cost, the payment change and how long it takes to break even. Sometimes the answer is wait.
Not every refinance is worth doing
A useful refinance has a job: lower total cost, free up monthly cash, change the term, address mortgage insurance or access equity. A lower payment alone doesn't prove it works.
Need cash? A cash-out refinance replaces and reprices your whole first mortgage. A home-equity loan or HELOC may leave a low first-mortgage rate alone. Compare all three before choosing.
A rate-term refinance changes the rate or repayment term without making cash-out the goal. IRRRL means the VA's Interest Rate Reduction Refinance Loan; FHA Streamline is FHA's streamlined refinance path. Both have separate requirements, not automatic approval.
Get my optionsWhat people ask us to check
- Lower my rate or change my term
- Take cash out
- Consolidate debt
- Pay off a HELOC
- Compare a second mortgage instead
- Drop mortgage insurance
- Change the payoff timeline
- VA IRRRL or FHA Streamline (if you qualify)
Break-even: the number that decides it
Divide the loan costs by the monthly savings to get simple cash-flow break-even. Example only, not a quote: $6,000 in costs divided by $200 a month is 30 months. Leave in 24 months and you recover only $4,800. Stay 48 months and the monthly savings total $9,600, before considering balance differences and other costs.
Example assumptions (Refinance break-even example): no mortgage insurance; refinance equity not modeled.
Existing/no-points: 6.261% interest rate · 6.261% APR · 22-year fixed · $0 new down payment · 264 monthly P&I payments of $2,794.39; $400,000.00 loan; $0.00 cash-paid prepaid finance charges.
Replacement/with-costs: 6.750% interest rate · 6.898% APR · 30-year fixed · $0 new down payment · 360 monthly P&I payments of $2,594.39; $400,000.00 loan; $6,000.00 cash-paid prepaid finance charges.
$6,000 cash-paid costs are assumed entirely prepaid finance charges, with no discount points. Existing APR assumes no unamortized charges, not its original disclosed APR; no other loan fees. Simple savings exclude balance differences. Amounts are approximate; single advance, first monthly payment one month later, no balloon. Taxes, property insurance and HOA are excluded; actual housing payment will be higher. Not a quote or approval; rates change daily and actual terms differ.
Closing costs
Separate fees and points from prepaid taxes and insurance. Prepaids fund future bills; they aren't all lender charges. Financed costs still cost money.
Term and flexibility
Restarting a 30-year clock can lower the payment and still cost more overall. Compare interest and remaining balances at the same future date.
Two details that surprise people
You don't get free interest by skipping a payment: interest owed through payoff is included in the payoff amount. And don't count an old escrow refund as cash available for the new closing; the old servicer refunds it separately. Plan for the new deposit.
Removing PMI might not need a refinance
For many conventional loans on a single-family principal residence, you can ask the servicer in writing to cancel PMI when the balance reaches 80% of the home's original value, subject to payment history and other requirements. Appreciation-based cancellation can follow different investor rules. Ask your servicer first; FHA insurance is different. CFPB's PMI cancellation guidance.
Read the refinance guide · Run the break-even calculator · Compare mortgage-insurance options
We compare more than the rate
- Interest rate
- APR
- Points and credits
- Lender fees
- Mortgage insurance
- Cash to close
- Break-even period
- Loan term
- Long-term flexibility
Worth it, or not yet?
Let's compare the costs and the math behind a yes, a no or a not-yet.
Rates, terms, and eligibility depend on credit profile, income, property, loan program, occupancy, market conditions, and underwriting approval.