Refinance Your Mortgage: Run the Break-Even Math Before You Sign

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Fix your holding period before comparing any offer
40 min
Every break-even calculation later in this guide divides costs by the months you will actually keep the new loan — never by its advertised 180 or 360. Three events cut that window short: selling the home, paying the loan off early (bonus, inheritance, retirement income shift), or refinancing again if rates fall further. Estimate the earliest of the three and write the reason beside each assumption. When estimates conflict, the shortest credible one governs, because costs left unrecovered at your exit are simply lost.
A free session with a HUD-approved housing counselor is a legitimate way to pressure-test shaky assumptions before any lender sees your file.
- Write down the month you realistically expect to sell, pay off, or refinance again — whichever comes first.
- Convert it to months from today; that number is your holding-period figure.
- Write one line of evidence for each assumption: school dates, job contract, retirement plan, rate outlook.
- Where two events compete, adopt the earlier month and note the runner-up beside it.

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