Refinance calculator
Refinance Break-Even Calculator
Use the refinance calculator to test whether a lower monthly payment is worth the closing costs and any term reset.
Example Use
Example: if a refinance costs $5,200 and saves $225 per month, the simple break-even point is about 24 months before considering term changes or total interest.
What it estimates
The calculator compares a current principal-and-interest payment with a new payment, then divides closing costs by monthly savings to estimate break-even months.
It also flags whether the new term is longer or shorter than the current remaining term.
How to use the result
If you expect to sell before the break-even point, the refinance may not recover its costs. If you plan to stay longer, compare both payment relief and lifetime interest.
Be careful with a new 30-year term when you are already several years into a mortgage. The lower payment may come partly from stretching repayment back out.
FAQs
What costs should I include?
Include lender fees, points, title fees, appraisal, recording costs, and any other refinance costs.
Can a lower payment still cost more?
Yes, especially if the refinance resets the term and increases lifetime interest.
Does this include taxes and insurance?
The refinance calculator focuses on principal and interest savings and closing costs.
Run the numbers