A refinance is worth doing when the money you save outruns what it costs you to get there. Everything else is noise.
Two numbers decide it: your monthly savings and your total closing costs.
Divide your closing costs by your monthly savings. The result is the number of months before the refinance pays for itself.
If closing costs are $6,000 and the new payment saves $250 a month, you break even in 24 months. Stay longer than that and you are ahead.
If you plan to sell before break-even, or your current rate is far below today's market and you only need a modest sum, a HELOC or home equity loan is usually the cheaper path.
Run your own figures through the calculator. No credit check, nothing saved unless you ask.
Calculate my equityThere is no universal threshold. Run the break-even math — on a large balance, even a 0.5% drop can pay off quickly.
Many conventional loans allow it immediately, though cash-out refinances often require six months of ownership seasoning.
Part of The Homeowner's Guide to Home Equity.
How a cash-out refinance works, how much cash you can take out of your home, what it costs, and when it beats a HELOC.
What cash-out refinance rates depend on, how they compare with regular refinance rates, and how to get a low rate on your cash-out.
A practical way to compare mortgage and refinance rates across lenders: APR, points, credit, and lock periods — so you can spot the genuinely low rate.