CalculateRealEstateROI

Financing

Refinance Strategy

Replacing existing debt with new financing to lower payments, extend term, or extract equity.

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Core concepts

Rate refi

Drop 75bps+ with 5+ year hold typically covers closing costs.

Cash-out refi

Extract trapped equity for redeployment; preserves 1031 deferral.

Term refi

Extend amortization for cash-flow relief on short-term debt.

Examples

  • $300k loan: 1% drop = $3,000/yr savings; $6k closing = 24-month breakeven.

Practical applications

  • Periodic portfolio refi audit.
  • BRRRR exits.
  • Equity redeployment cycles.

Common mistakes

  • Refinancing into worse terms for cash extraction.
  • Ignoring prepayment penalty timing.