Refinance Break-Even Calculator
See your new payment, monthly savings, and how many months it takes to earn back the closing costs.
✏️ These numbers were filled in from a shared link — change anything to make it your own.
How the break-even works
The headline number is simple:
break-even months = closing costs ÷ monthly savings
If you'll keep the loan longer than that, refinancing pays. If you might sell or refinance again sooner, it doesn't.
But watch the lifetime difference too. Stretching a loan you're years into back out to a fresh 30-year term lowers the monthly payment while potentially increasing total interest. A refinance can win monthly and lose lifetime — both numbers are shown above so you can decide which you care about.
Comparing a whole new purchase instead? Try the Mortgage Calculator or Rent vs Buy.
Principal-and-interest only; excludes taxes, insurance, PMI, and escrow. General information, not financial advice.
Frequently asked questions
How do you calculate the refinance break-even point?
Divide your closing costs by your monthly payment savings. If refinancing costs $6,000 and saves $250 a month, you break even in 24 months. If you plan to sell or refinance again before then, the refinance loses money.
Is it worth refinancing for 1%?
The old “refinance at 1% lower” rule of thumb is a shortcut, not an answer. What matters is your break-even month versus how long you will keep the loan. A 0.5% drop on a large balance with low closing costs can beat a 1% drop on a small balance with high costs.
Why does resetting the term matter?
Refinancing a loan you are 8 years into back to a fresh 30-year term lowers the payment partly by stretching it out — which can mean paying more total interest even at a lower rate. This calculator shows lifetime interest both ways so you can see that trade-off, not just the monthly savings.
Should I roll closing costs into the loan?
You can, and it avoids cash at closing, but you then pay interest on those costs for the life of the loan. Either way, enter the full closing-cost figure here — the break-even math is the same regardless of how you fund it.