Refinance Break-Even Calculator: When Will You Save?

Find out how long it may take to recover your mortgage refinancing costs through lower monthly payments. Enter your current payment, proposed new payment, and estimated closing costs to calculate your monthly savings and estimated break-even period.

1. Enter your current payment: Add your existing monthly mortgage payment.
2. Enter your new payment: Use the estimated monthly payment offered for the refinanced loan.
3. Enter closing costs: Include the estimated costs of completing the refinance.
4. Calculate your savings: Review the monthly payment difference and the number of months needed to recover the closing costs.

Use realistic figures from your current mortgage statement and refinance estimate for a more useful result.

The break-even point is the time it takes for your accumulated monthly payment savings to equal the upfront costs of refinancing.

Break-even period = Refinancing closing costs / Monthly payment savings

For example, if refinancing costs $6,000 and reduces your monthly payment by $300, you would recover those costs in approximately 20 months. After that point, the payment savings may outweigh the initial costs, provided your circumstances and loan terms remain unchanged.

Refinancing may be worth considering if you expect to keep the mortgage beyond the break-even point and the new loan supports your financial goals. However, a lower monthly payment does not automatically mean a cheaper mortgage. Extending the repayment term may reduce monthly payments while increasing the total interest paid over time.

Compare the new interest rate, remaining loan term, closing costs, and total borrowing costs before deciding. You can use the Mortgage Interest Calculator to explore interest costs and the Mortgage Calculator With Taxes and Insurance to estimate broader monthly housing expenses.

Enter the expected refinance costs, including applicable lender fees, appraisal charges, title or legal fees, and other transaction expenses. If some costs are rolled into the new loan, consider how that affects the loan balance and total interest rather than treating them as cost-free.

The calculator uses the difference between the two monthly payments and the closing costs you enter. It does not independently verify lender quotes or account for every possible change in loan balance, loan term, taxes, insurance, or future interest costs.

Important: This is an estimate, not a guarantee of savings. Your actual break-even point depends on the final loan terms, all refinancing expenses, and how long you keep the refinanced mortgage.