Finance category
Mortgage, loan, investing, tax, and money calculators.
Refinance Break-Even Calculator
Pinpoint the month your refinance starts paying off. Enter your current loan, the new offer, closing costs, and how long you realistically plan to keep the mortgage to see whether the refi clears break-even.
When checked, closing costs are added to the new loan amount instead of paid out of pocket.
Break-even
1 years, 11 months
Monthly savings
$283.13
New monthly payment
$1,970.30
Net value at hold
$17,282.56
Payment comparison
Current payment
$2,253.42
New payment
$1,970.30
New loan amount
$320,000.00
Closing-cost recovery
$6,500.00
Decision signal
Break-even verdict
Your expected hold period clears break-even, so the refinance may be worth a closer look.
Lifetime interest change
$20,802.12
Positive means the refinance reduces total interest over the loan life. A longer new term can still raise total interest even when the monthly payment drops.
How to Use
- Enter your current balance, existing rate, and remaining term so the calculator can price the current monthly payment.
- Add the new rate and new term being offered by the lender you are comparing.
- Include total closing costs and choose whether you would roll them into the new loan or pay out of pocket.
- Set how many years you expect to keep the loan before selling or refinancing again to see net value at that hold period.
Frequently Asked Questions
How is refinance break-even calculated?
Break-even months equals closing costs divided by monthly payment savings. It is the number of months the lower payment takes to recover the upfront cost of replacing the loan.
Does rolling closing costs into the loan change break-even?
Yes. Financing closing costs raises the new loan amount and slightly lifts the new payment, so monthly savings shrink. That pushes break-even further out even when you are not writing a check at the table.
Why can net value at hold be negative?
If you do not plan to keep the loan past break-even, monthly savings over that window do not cover the closing costs. The net value turns negative and the refinance loses money in the real hold period.
Is a lower monthly payment enough to justify refinancing?
Not by itself. A longer new term can lower the payment while increasing lifetime interest. Use the payment drop together with break-even timing and lifetime interest change to decide.
Can I use this for auto or personal loan refinancing?
Yes. The underlying break-even math applies to any fixed-rate installment loan, so the output still works for auto or personal loan refinance comparisons.
Related Calculators
Refinance Calculator
Run the full side-by-side payment, lifetime cost, and savings comparison for a refinance.
Refinance Closing Cost Calculator
Build up the closing-cost total that feeds the break-even calculation here.
Mortgage Points Calculator
Use the same break-even thinking for buying discount points on a new purchase.
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