Break-even Point – What Does That Mean?
Have you heard the term 'break-even point' as it relates to refinancing a mortgage?
Homeowners may decide to refinance in order to get a lower interest rate. Because the transaction costs money, it's smart to consider how long you need to live in the house to break even – when the cost of the refinance balances out with the interest rate savings.
Online calculators can help you weigh the various factors: current interest rate, potential rate, closing costs and how long you will stay in your home.