Compare the written costs
Use the Loan Estimate to identify the proposed payment, loan amount, and closing charges. Ask for the assumptions behind the comparison, including points or lender credits, rather than relying only on a rate advertisement. CFPB — Loan Estimate explainer ↗
Separate payment relief from lifetime savings
Restarting a longer term can reduce the monthly payment while extending repayment. Look at the balance you expect to owe at your likely sale or refinance date. Financing costs into the loan also increases the amount you borrow.
Test more than one timeline
Run a short, medium, and long holding period. Include the possibility of moving sooner than expected. If the main goal is cash-flow relief, name that goal explicitly and weigh the trade-off rather than labeling every lower payment a saving.
PUT IT INTO PERSPECTIVE
An example, not an offer
Illustration only: $6,000 in relevant refinance costs divided by $200 in monthly payment reduction gives a 30-month simple break-even. That calculation omits balance differences, the time value of money, and changes in taxes or insurance.
Run the break-even calculator →Related questions
Check the original guidance
Requirements and availability can change. Confirm the program and lender terms for your application.