LA's rent-to-price ratio and Prop 13 make long-term ownership attractive. Here's how to decide if refinancing pays off, and when.
Rates & Context (LA 2025)
- Conforming/jumbo rates: ~5.6%–6.2%
- Common loan sizes: $500K–$900K
- Earthquake insurance: $50–$150/month (separate from homeowners)
When Refinance Makes Sense in LA
- Rate drop ≥ 0.75% with break-even ≤ 36 months
- You’ll stay ≥ 4 years and have no prepayment penalty
- Net savings remain positive after rolling costs into loan
Example: $760K Balance at 6.5% → 5.6% Refi, $8,000 Costs
- Current P&I: ≈ $4,804
- New P&I: ≈ $4,250
- Monthly savings: ≈ $554
- Break-even: $8,000 ÷ $554 ≈ 14 months
- Interest saved vs current: ≈ $95,000
- Net savings after costs: ≈ $87,000
Validate with your real numbers in the refinance calculator.
FAQ
Does earthquake insurance affect refi math?
It doesn’t change P&I, but it affects total monthly cost. Focus your refi decision on payment savings and break-even months.
Is rolling costs into the loan smart?
Financing costs increases the new payment slightly but preserves cash. As long as break-even and net savings stay favorable, it’s a reasonable trade-off.
Related Tools & Sources
- Refinance Calculator – compute break-even and net savings.
- How to Use the Refinance Calculator – step-by-step guide.
- Mortgage Calculator – visualize amortization and extra payments.
- Mortgage Extra Payment Calculator: Save Interest – real examples and payoff strategies.
- Best Free Mortgage Calculators 2025 – compare top tools side-by-side.
- Home Affordability – confirm the new payment fits your budget.
- Freddie Mac PMMS – weekly mortgage rate trends.
- FHFA Conforming Loan Limits – jumbo thresholds by county.
- CFPB on Discount Points – how points trade off with rate.
Run Your LA Refi
Use the Refinance Calculator to compare scenarios before you lock a rate.