Refinance break-even calculator
Refinancing only pays off once your monthly savings cover the closing costs. See how many months until you break even— and whether it’s worth it at all.
You break even after
1 yr 9 mo
then you save $298.99/mo. Refinance is worth it if you stay past this.
- Current payment
- $2,097.64
- New payment
- $1,798.65
- Lifetime savings
- $101,637
Break-even ignores taxes and assumes you keep the loan; a lower rate alone doesn’t guarantee savings if you move soon.
How the break-even point is calculated
The break-even point is simply the time it takes for monthly savings to repay your closing costs:
monthly savings = current payment − new payment break-even (months) = closing costs ÷ monthly savings
If you stay in the home past the break-even month, refinancing saves money; if you leave before it, the closing costs outweigh the savings.
How to compare refinance offers
A lower rate shortens your break-even and grows lifetime savings. Comparing several lenders is the single biggest factor in how fast a refinance pays off.
What to compare before you sign
- Compare APR and points, not just the rate. APR folds in lender fees, so it's the fairer comparison. Also check whether a quoted rate assumes you pay discount points up front.
- Weigh closing costs against the savings. Refinancing usually costs 2–5% of the loan. That's what sets your break-even point — how many months until the lower payment pays back those costs.
- Mind the loan term. A lower rate on a longer term can still cost more total interest. Compare lifetime cost, not just the monthly payment.
- Get at least three quotes. On a balance this size, a small rate difference compounds over the life of the loan. Quoting several lenders is the biggest lever on your cost.
Free, unbiased basics: CFPB: shopping for a mortgage refinance.
Frequently asked questions
How do you calculate the refinance break-even point?+
Divide your total closing costs by the monthly payment savings from the new rate. The result is the number of months it takes for the savings to cover the cost of refinancing. For example, $6,000 in closing costs with $250/month in savings breaks even in 24 months.
Is refinancing worth it if I'll move before break-even?+
Usually not. If you sell or refinance again before reaching the break-even month, you'll have paid more in closing costs than you saved. Compare the break-even point to how long you plan to stay in the home.
Does a lower interest rate always save money?+
No. A lower rate cuts your monthly payment, but closing costs and extending the term can offset or erase the savings. The break-even point and lifetime savings figure tell you whether the refinance actually pays off.
What are typical refinance closing costs?+
Refinance closing costs usually run 2–5% of the loan amount, covering the appraisal, origination, title and other fees. On a $300,000 loan that's roughly $6,000–$15,000.
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