Refinance Break-Even Calculator

Enter your current monthly payment and the projected payment after refinancing. The difference is your monthly savings.

Add expected closing costs, including lender fees, appraisal, title charges, and prepaid items you pay out of pocket.

Divide closing costs by monthly savings to find the break-even point. If you plan to keep the loan longer than that, refinancing may be financially favorable.

Refinancing replaces an existing loan with a new one, usually to reduce the interest rate, change the term, or access equity. The break-even calculation answers a practical question: how long must you keep the new loan before cumulative savings exceed the upfront cash you spent to close.

Closing costs vary widely by state, lender, and loan size. Ask for a loan estimate or closing disclosure so you can enter a realistic all-in figure rather than relying on generic averages found online.

Monthly savings here assume the new payment stays lower for the entire break-even window. If you refinance into a shorter term, the payment may not fall even though total interest savings can still be meaningful over the life of the loan.

Pair this result with your expected time in the home. If you might relocate before break-even, the refinance could cost more than it saves unless you also value non-cash benefits such as removing mortgage insurance or switching from an adjustable to a fixed rate.