The old advice — refinance whenever you can drop your rate by 1% — was built for a different era. Today, with closing costs ranging from 2% to 5% of your loan and a wide spread between products, the right question is when you'll break even.
The break-even formula
Total closing costs ÷ monthly savings = months to break even. If you'll stay in the home longer than that, refinance. The calculator below does the math for you in seconds.
When even a small drop is worth it
If you're rolling closing costs into the new loan and don't need to write a check, the break-even period is usually 24–36 months. If you're confident you'll stay 5+ years, even a 0.5% drop pays off.
Reasons to refinance besides rate
Drop PMI now that you have 20% equity, switch from ARM to fixed before reset, shorten from 30 to 15 years to build equity faster, or pull cash out for renovations.
Use our free calculators to apply this to your situation in seconds.
Frequently asked questions
How much does a refinance cost?
Typically 2%–5% of the loan amount. On a $400k loan that's $8k–$20k. Bloomfield offers no-cost refi options where the rate is slightly higher in exchange for zero out-of-pocket.
How long does a refinance take?
30–45 days on average; we routinely close streamlined refis in 21 days.
Will refinancing reset my 30 years?
Only if you choose a new 30-year term. You can refinance into a 20- or 15-year to stay on track with your payoff goal.