What's a typical closing cost?

Usually 2–5% of the loan amount. On a $280k loan that's $5,600–$14,000. Some lenders offer "no-closing-cost" refinances by rolling fees into a slightly higher rate.

How much rate drop justifies a refinance?

Old rule was 1%. With current closing costs, even 0.5% can be worth it if you stay long enough — let the break-even number decide.

Refinance Calculator

Break-even months and lifetime savings from refinancing your mortgage.

Result

Monthly savings

$345.17

Current monthly payment$2,069.18
New monthly payment$1,724.01
Break-even months14 months (1.2 yrs)
Lifetime cost — current$620,752.59
Lifetime cost — new + fees$625,142.94
Lifetime savingspositive = refinance wins-$4,390.35

How to use this calculator

Enter your current loan balance, rate, and years remaining.
Type the new rate you've been quoted and the new term.
Add the lender's estimated closing costs (often 2–5% of loan).
Check the break-even — only refinance if you'll stay past that point.

About this tool

Refinancing is a bet: you pay closing costs upfront in exchange for a lower monthly payment over the new loan's life. The two numbers that matter are the break-even month (how long until the monthly savings cover the closing fees) and the lifetime savings (does the deal still win once you account for the longer term you're probably extending into?). Rule of thumb: if you'll stay in the home longer than the break-even period and the lifetime savings are positive, refinance. If either fails, stick with the current loan.