Mortgage Refinance Break-Even Calculator
Calculate how long it takes to recoup refinancing costs through lower monthly payments
About this calculator
A Mortgage Refinance Break-Even Calculator helps homeowners determine whether refinancing their mortgage makes financial sense by calculating the break-even point. This tool compares your current mortgage payment against the new payment after refinancing, factoring in closing costs and fees. It shows exactly how many months it will take to recover the upfront refinancing costs through your monthly savings, helping you make an informed decision about whether to proceed with refinancing based on your financial timeline.
How to use
Enter your current mortgage balance, interest rate, and monthly payment along with the new loan's interest rate and closing costs. The calculator will determine your new monthly payment and divide the total refinancing costs by your monthly savings to show the break-even timeline in months.
Frequently asked questions
What is a good break-even period for refinancing?
Generally, a break-even period of 2-3 years is considered favorable, especially if you plan to stay in your home longer than that timeframe.
What costs should I include in the refinancing calculation?
Include all closing costs such as origination fees, appraisal fees, title insurance, attorney fees, and any points paid to reduce the interest rate.
Should I refinance if I'm moving soon?
If you plan to move before reaching the break-even point, refinancing typically isn't worthwhile since you won't recoup the upfront costs through monthly savings.