Refinance Break Even Calculator
Find how many months a refinance takes to repay its closing costs, and compare remaining interest.
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Your numbers
Find the break-even month
Your projection
Break even in 24 months
Monthly saving
$314.24
Remaining interest, current loan
$410,108
Interest plus costs, new loan
$385,606
A lower payment on a longer term can cost more over the life of the loan. Compare the remaining interest as well as the monthly saving, and use the Loan Estimate's closing costs rather than a guess.
About this tool
Method, assumptions, practical next steps, and limits.
Two questions, not one
A refinance must pass two tests: you stay in the home long enough to recover the closing costs, and the new loan does not cost more over its life by restarting the clock.
How the calculation works
Break-even months = closing costs ÷ (current payment − new payment)
A $320,000 balance at 7.25% with 27 years left costs $2,253.42 a month. Refinancing to 6.1% for 30 years costs $1,939.18, saving $314.24. With $7,500 of closing costs, break-even is 24 months. Remaining interest falls from about $410,100 to about $385,600 including costs, even with three extra years.
When to be careful
If you expect to move before break-even, the refinance loses money. Rolling costs into the loan hides them in the balance. Use the closing costs on the lender’s Loan Estimate; the CFPB publishes a guide to reading it.
