How the comparison works
One method behind every calculator on this site, stated in full so you can check it — or disagree with it.
How does Refi Compass compare mortgage options?
Every option is costed on net cost over the number of years you expect to stay: the cash you pay out plus the balance still owed at the end, against simply keeping your current mortgage.
Net cost over a holding period
Charging the balance left at the end is what makes loans of different sizes and terms comparable.
A longer term moves less cash each month but leaves more owed. A comparison that counts only payments always flatters the longer loan, because the debt it has not repaid is left off the bill. Counting both the cash paid and the balance outstanding at the end of your horizon puts a 30-year refinance, a recast and a HELOC on the same scale.
Every figure is one you type. The site fetches no rates and estimates none, and the arithmetic runs in your browser.
Break-even, and why it differs from the usual formula
Break-even here is the first month an option's position falls to or below keeping the current mortgage.
The industry formula is closing costs divided by the monthly saving. It ignores the balance, and it has no answer at all when the new payment is higher, which is the case for a recast or extra principal. On $400,000 at 6.875% with 24 years left, refinancing to 5.875% with $8,000 of closing costs:
| New term | Simple payback | Equity-adjusted break-even | Interest vs keeping |
|---|---|---|---|
| 30 years | month 17 | month 26 | $34,014 more |
| 25 years | month 28 | month 25 | $53,783 less |
| 20 years | month 3,042 | month 24 | $136,931 less |
Computed by the same engine as the calculators and re-checked on every build. Closing costs paid in cash.
Cost per dollar raised
Ways of borrowing against your home are compared on what each dollar of cash costs over your horizon.
| Route | Cost above keeping | Per dollar raised |
|---|---|---|
| Home equity loan | $38,586 | $0.64 |
| HELOC | $51,500 | $0.86 |
| Cash-out refinance | $148,994 | $2.48 |
A cash-out refinance re-prices the whole balance; a second lien re-prices only the sum borrowed. That is why the lowest rate of the three costs the most here.
What the method leaves out
Cost over a horizon is one input to a decision, not the decision.
It cannot see income security, how much cash you need on hand, or how long you will really stay, and those decide as many of these questions as the interest does. Tax is not modelled. Results are listed in a fixed order with keeping your current mortgage first; there is no ranking and no winner. Nothing here is a rate quote, an eligibility decision, or financial, tax or legal advice.
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