Mortgage refinance

Should I Refinance My 5% Mortgage to 6%?

The deciding number is the break-even month. Refinance only makes sense if you will own the home past it.

The short answer

Refinancing a $400K mortgage from 5.0% to 6.0% raises your monthly payment by about $250, costs $8,000 in fees, and never breaks even — you should not refinance. The math only works when the new rate is at least 0.75 percentage points LOWER, not higher.

Run the math yourself

These calculators give you the same numbers we used above — with your own inputs.

Mortgage Payment CalculatorCompare old vs new monthly payment side by side.Loan Prepayment CalculatorSee if paying extra on your existing loan beats refinancing.ROI CalculatorCompute the actual ROI on the closing costs.

Bottom line

A rate INCREASE refinance does not save money. Run the break-even calculator below. The rule of thumb: only refinance if you can recover closing costs within 36 months, and only if you plan to keep the home longer than that.

Disclaimer. This is educational, not personalized financial advice. Numbers depend on your specific tax bracket, state, and goals. Verify with the IRS, SSA, or a CPA before acting. See our Financial Disclaimer.