Guide
Is it worth refinancing for half a percent?
Sometimes: a 0.5% drop pays off when the loan is large and closing costs are low. On $400,000, going from 7.63% to 7.13% saves about $136 a month and breaks even in 59 months at 2% closing costs.
Last reviewed November 13, 2026 · Examples use this week's rates
30-yr fixed avg 7.11% as of November 12, 2026
Source: Freddie Mac PMMS
Why the loan size matters more at 0.5%
Half a point saves roughly half as much per month as a full point, so the break-even period is about twice as long for the same closing costs. On smaller balances, that can stretch beyond the time many homeowners stay in a loan.
On larger balances, the dollar savings grow, and a half-point refinance can still recover costs within a few years — especially if you negotiate fees down or the lender offers a credit.
Ways to make a small drop work
Shop several lenders, compare the fees on page two of each Loan Estimate, and ask about lender credits. If you're on an FHA or VA loan, streamline programs may have lower costs and less paperwork. If you also drop mortgage insurance at the same time, add that saving to the monthly figure.
Be careful with rolling costs into the loan: it avoids cash at closing but slightly reduces your savings, which lengthens break-even further.
When to skip it
If you expect to move within a few years, have a small balance, or are well into your current term, a half-point refinance is often not worth the cost and effort. Run your exact numbers first.
Worked example at this week's rates
- $200,000 from 7.63% to 7.13%: saves $68/month, break-even in 59 months at 2% closing costs.
- $300,000 from 7.63% to 7.13%: saves $102/month, break-even in 59 months at 2% closing costs.
- $500,000 from 7.63% to 7.13%: saves $170/month, break-even in 59 months at 2% closing costs.
Rates are Freddie Mac PMMS weekly averages — a national purchase-mortgage benchmark, not a local refinance quote. Closing costs are estimated at 2% unless stated, and payments are principal and interest only.
Run your own numbers
Use the Refinance break-even calculator with your balance, rate and costs. Or see a worked scenario: $500,000 from 7.5% to 7%.
Estimates only. Default rates are Freddie Mac PMMS weekly averages — a national purchase-mortgage benchmark, not a local refinance quote. Payments are principal and interest only. reficalculator.com is not a lender or broker; see how we calculate.
Frequently asked questions
- Is a 0.5% refinance ever worth it?
- Yes, when the balance is large, costs are low and you'll keep the loan past the break-even point.
- How long is break-even on a half-point refinance?
- Roughly twice as long as a full-point refinance with the same costs. The examples on this page show exact months at current rates.
- Can I lower closing costs?
- Compare Loan Estimates, shop the services your lender lets you shop for, and ask about lender credits.
- Is a streamline refinance cheaper?
- FHA Streamline and VA IRRRL programs often have reduced documentation and can have lower costs, but fees vary by lender.
- What if I plan to move soon?
- If you'll move before break-even, the refinance costs more than it saves.