Payment savings
Compare the current total payment with the proposed loan payment.
Refinance decision
A refinance should solve a financial problem, not simply create a lower rate.
Refinancing can reduce payment, shorten term, change loan type, remove certain mortgage insurance, or access equity. Each goal requires a different comparison.
Break-even
Estimate how long it takes for savings to recover the refinance costs.
Term
Restarting a longer loan term can lower payment while increasing the time required to become debt-free.
Loan balance
Financed closing costs or cash-out can increase the new principal balance.
Equity
Loan-to-value can influence pricing, mortgage insurance, and available refinance options.
Goal
Define whether the objective is cash flow, interest savings, debt restructuring, term reduction, or access to equity.