When you plan to stay in your home long enough to realize the savings from re-financing.
There’s a simple formula to determine how many months it will take to realize savings from re-financing: Costs (quoted by your refinancing lender) ÷ Savings = Months to pay off the costs and break even.
For example, if re-financing decreases your monthly payment by $200 and it costs $1,200 to refinance, it will take 6 months to break even. After that, enjoy the savings!
