Refinance Break-Even Calculator
Compare your current mortgage vs a new rate to find your break-even point. Calculate monthly savings and determine if refinancing makes financial sense.
Inputs
Results
Refinance makes sense!
- Current payment: $1,996
- New payment: $1,770
- Difference: $226/month
- Closing costs: $4,500
- Monthly savings: $226
- Break-even: 20 months (1.7 years)
- After 1 year: -$1,785
- After 3 years: $3,645
- After 5 years: $9,074
- Current loan (if held): $390,666 (28 years)
- New loan (if held): $357,125 (30 years)
- Difference: $33,541 saved
- New loan amount: $280,000
- Cash needed at closing: $4,500
Tip: If break-even is under 2-3 years and you plan to stay, refinancing usually makes sense. Watch for longer terms resetting your payoff timeline.
When to Use This Calculator
Use this calculator when interest rates drop and you're considering refinancing your existing mortgage. It helps you determine exactly how long it takes for your monthly savings to exceed the closing costs, so you can make an informed decision about whether refinancing is worth it.
How It Works
This calculator compares your current monthly mortgage payment against the new payment at a lower rate, calculates the monthly savings, then divides your expected closing costs by that savings to find the break-even point in months. It also projects total savings over 5 years to show the longer-term picture.
Key Terms
How to Use This Refinance Break-Even Calculator (Mini Guide)
Compare your current mortgage to a new rate and find out how many months until refinance costs pay for themselves — essential for timing refinance decisions.
What this calculator shows
Compares your current monthly payment vs a new refinanced payment.
Calculates break-even point: how many months until closing cost savings are recouped.
Shows 5-year net savings to help you decide if it's worth the hassle.
When refinancing makes sense
Rate drops by 0.5%+ and you plan to stay 2-3+ years.
You can switch from ARM to fixed and lock in stability.
You want to shorten term (30yr → 15yr) without drastically increasing payment.
Understanding break-even
Break-even under 24 months = usually worth it.
Break-even 24-36 months = depends on how long you'll stay.
Break-even over 36 months = probably not worth the effort unless rate savings are huge.
Watch out for
Resetting to a new 30-year term extends your payoff timeline significantly.
Lifetime interest may go UP if you extend the term, even with a lower rate.
Don't forget closing costs — they can be $3K-$6K+ depending on loan size.
Try with Local Assumptions
Select a city to pre-fill the calculator with local market defaults.