Free Refinance Break-Even Calculator

How it works

Enter your current loan balance, rate, and remaining term, then the rate, term, and closing costs of the new loan you are considering. The calculator compares the two monthly payments, shows your monthly savings, calculates how many months it takes for those savings to cover the closing costs — your break-even point — and totals up the lifetime difference.

The formula

Both payments use the standard loan formula on the same balance, with monthly rate r = APR ÷ 100 ÷ 12 and n = term in months: M = P × r × (1 + r)^n ÷ ((1 + r)^n − 1). Monthly savings are the current payment minus the new payment, and the break-even point is closing costs ÷ monthly savings — the month where cumulative savings catch up with what the refinance cost you. Net lifetime savings compare the full remaining cost of the current loan (payment × months left) against the new loan’s full cost (payment × new months + closing costs).

Everyday uses

• Rate-drop decisions: rates fell a point since you bought — find out in seconds whether a refinance is actually worth it for your balance.
• Offer comparisons: lenders quote different rates, terms, and closing costs; this turns each offer into one break-even number.
• Move-or-stay planning: if you might sell in three years, the break-even month tells you whether refinancing before the move makes sense.
• Term-reset awareness: see the trade-off between a lower payment on a fresh 30-year term and the extra lifetime interest it can add.

Frequently asked questions

What is a good break-even point?

Shorter is better. Many homeowners look for a break-even under 24–36 months, and it only makes sense if you expect to stay in the home (and keep the loan) well past that point. If you might move or refinance again before break-even, the closing costs are money lost.

Why can monthly savings be positive but lifetime savings negative?

Because the new loan may stretch your balance over more years. Restarting a 30-year clock lowers each payment but adds years of interest. That is why this calculator shows both figures — a lower payment is not the same thing as a cheaper loan.

What closing costs should I include?

Lender fees, appraisal, title insurance, recording fees, and any points you pay — typically 2–5% of the loan amount. If the lender rolls the costs into the loan instead of charging them upfront, add them to the balance you enter so the comparison stays honest.