🔄Current Mortgage
$
$50,000$2,000,000
%
1.000%15.000%
yr
1 yr30 yr
✨New Refinanced Mortgage
%
1.000%15.000%
$
$0$25,000
Typically 2–5% of loan amount. Ask your lender for a Loan Estimate.
Find out how much you'll save monthly, when you'll break even on closing costs, and your total lifetime savings.
Typically 2–5% of loan amount. Ask your lender for a Loan Estimate.
The Refinance Break-Even Calculator compares your current mortgage to a new loan offer and tells you exactly how much you'll save each month, how many months it takes to recoup the closing costs, and how much you'll save (or lose) over the life of the new loan.
Enter your current balance, rate, and remaining term, plus the new rate, term, and estimated closing costs. The calculator instantly shows your monthly savings and break-even point — the key number for deciding whether refinancing is worth it.
Break-Even (months) = Closing Costs ÷ Monthly SavingsMonthly savings is the difference between your current payment and the new loan's payment. If you plan to stay in the home longer than the break-even period, refinancing typically saves you money overall.
Example 1: Rate drop from 7.5% to 6.25%
$320,000 balance, 25 years remaining at 7.5%, refinanced into a new 30-year loan at 6.25% with $6,500 in closing costs.
Monthly savings ≈ $230 → break-even ≈ 28 months. If you stay longer than ~2.5 years, refinancing pays off.
Example 2: Small rate drop, high closing costs
Same $320,000 balance, but rate only drops from 7.0% to 6.75% with $9,000 in closing costs.
Monthly savings ≈ $58 → break-even ≈ 155 months (almost 13 years) — likely not worth it unless you plan to stay long-term.
Methodology
Monthly payments computed using standard fixed-rate formula. Break-even = closing costs ÷ monthly savings. Lifetime savings = remaining balance on old schedule minus total payments on new schedule.
Refinancing typically makes sense when you can reduce your rate by at least 0.5–1%, and you plan to stay in the home longer than the break-even period. Use this calculator to find your exact break-even point. Generally, a break-even under 24 months is considered favorable.
Refinancing closing costs typically run 2–5% of the loan amount ($6,000–$15,000 on a $300K loan). They include origination fees, appraisal, title insurance, and prepaid items. Some lenders offer 'no-cost' refinancing by rolling costs into a higher rate.
A cash-out refinance replaces your mortgage with a larger loan and gives you the difference in cash. This can be used for home improvements or debt consolidation. The trade-off: higher loan balance, larger payments, and you reset your amortization clock.
Disclaimer: Calculations are for informational purposes only and do not constitute professional financial advice. Please consult with a certified professional before making financial decisions.