Refinance Break-Even Calculator
Enter your current loan details, the new rate you're offered, and the closing costs to refinance - this calculates your monthly savings and how long it takes to break even.
Last updated: September 22, 2026
Frequently asked questions
How is the break-even point calculated?
Closing costs divided by your monthly payment savings (current payment minus new payment). For example, $5,000 in closing costs with $150/month in savings breaks even in about 33.3 months, or just under 3 years.
Should I refinance if the break-even point is 5 years away?
It depends mainly on how long you plan to keep the loan (or stay in the home) - if you expect to move or refinance again before reaching break-even, you likely won't recoup the closing costs. If you're confident you'll hold the loan well past that point, the ongoing monthly savings make it worthwhile.
Does a lower monthly payment always mean refinancing saves money overall?
Not necessarily - if the new loan resets your term back to 30 years (even from a shorter remaining term) or extends it, you can lower your monthly payment while paying more total interest over the life of the loan, since you're financing the balance over more months. This calculator focuses on payment-based break-even, not total lifetime interest - compare a mortgage or mortgage payoff calculator's total-interest figures too before deciding.
What counts as refinance closing costs?
Typically lender origination fees, appraisal fees, title search and insurance, recording fees, and sometimes points paid to buy down the rate - your loan estimate from the lender will itemize these. Enter the total here, not just one line item.
Why does keeping the same remaining term versus resetting to 30 years matter here?
If you refinance into a new 30-year loan when you only had, say, 20 years left, your payment drops (spread over more months) but you may pay more interest overall - this calculator lets you set the new term independently so you can compare a same-length payoff against a reset term and see how each changes your break-even and payment.
Is it worth refinancing for a rate drop of less than 1%?
It can be, especially on a large remaining balance or long remaining term, since even a small rate drop compounds meaningfully over time - but the closing costs matter more than the rate drop alone. Run the numbers here: a small rate improvement with low closing costs can break even quickly, while the same rate improvement with high closing costs might not be worth it if you won't hold the loan long enough.