Mortgage Refinance Break-Even Calculator

Refinancing lowers your interest rate and monthly payment — but closing costs mean you lose money upfront before you start saving. The break-even point is the number of months until your cumulative monthly savings equal your closing costs. If you plan to stay in your home longer than the break-even period, refinancing is almost certainly worth it.

Enter Your Measurements

Current Monthly Payment ($)($)

New Monthly Payment ($)($)

Total Closing Costs ($)($)

Remaining Loan Balance ($)($)

Current Interest Rate (%)(%)

New Interest Rate (%)(%)

Results

Break-Even Point (months)

months

Monthly Savings

300

USD

Annual Savings

3,600

USD

5-Year Net Savings (after closing costs)

12,000

USD

Formula

Break-Even Months = Closing Costs ÷ Monthly Savings | Monthly Savings = Current Payment − New Payment

How to Use This Calculator

How to Use

1
Enter your current monthly principal + interest payment.
2
Enter the new monthly payment you'd have under the refinanced loan.
3
Enter your estimated closing costs (typically 2–5% of the loan balance).
4
The break-even point is closing costs ÷ monthly savings.
5
If you plan to stay past the break-even date, refinancing is likely worth it.

Frequently Asked Questions

What is a typical break-even period for refinancing?

Most refinances break even in 18–36 months. If you're planning to move within 2 years, refinancing rarely makes financial sense even with a significantly lower rate.

What closing costs should I expect?

Closing costs for a refinance typically run 2–5% of the loan balance, covering origination fees, appraisal, title insurance, and recording fees. A $300,000 loan would have $6,000–$15,000 in costs. Some lenders offer no-closing-cost refinances, but they charge a higher rate or roll costs into the loan balance.

Should I include taxes and insurance in my payment comparison?

For break-even purposes, compare only principal and interest — taxes and insurance don't change with a refinance. If your lender quotes a PITI (principal, interest, taxes, insurance) payment, subtract the T&I portion before entering figures.

How does cash-out refinancing affect the calculation?

Cash-out refinancing complicates the break-even math because you're also converting home equity to cash. Calculate the break-even on rate savings separately, then assess whether the equity you're cashing out is worth the higher loan balance and potentially higher rate.

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About This Calculator

This calculator uses the formula: Break-Even Months = Closing Costs ÷ Monthly Savings | Monthly Savings = Current Payment − New Payment. All calculations follow industry-standard methods. Results are estimates — always verify with a licensed professional for structural or code-compliant work.

Built and maintained by the CalcSmart team. Last updated March 2026.

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