Refinance Break-Even Calculator
A lower rate isn't automatically a win. This tells you the exact month your smaller payment repays the closing costs — and warns you when a fresh 30-year term quietly costs more over the long run.
Open the refinance calculator →Free, instant, no sign-up. Adjust rates and costs and watch the break-even month move in real time.
How the break-even is calculated
Refinancing has an upfront cost (appraisal, title, lender fees) and an ongoing benefit (a smaller payment). You break even the month those accumulated savings equal the cost:
Break-even (months) = Closing costs ÷ (Current payment − New payment)
If you'll still own the home after the break-even month, the refinance pays off. If you might sell or refinance again before then, it usually doesn't. The calculator also charts your cumulative savings so you can see the crossover, and flags when the new term adds lifetime interest despite the lower payment.
| Current loan — $310,000 at 7.25%, 27 years left | $2,183/mo |
| New loan — 5.75%, 30-year term | $1,809/mo |
| Monthly savings | $374 |
| Closing costs | $6,000 |
| Break-even | 17 months |
After month 17 (about 1.4 years), every month is net savings. Stay in the home five more years and that's roughly $22,000 kept — but note the reset 30-year term, which the tool accounts for in the lifetime-interest comparison.
Common questions
How do you calculate a refinance break-even point?
Divide total closing costs by your monthly payment savings. Saving $374/month on $6,000 of costs breaks even in about 17 months. Past that point, the refinance has paid for itself.
Can refinancing to a lower rate still cost me more?
Yes — refinancing usually resets the clock to 30 years, so total interest can rise even as the monthly payment falls. Always compare lifetime interest, which the calculator shows alongside the payment.
Should I roll closing costs into the loan?
Rolling them in means no cash out of pocket and immediate monthly savings, but you finance those costs at your mortgage rate on a bigger balance. Paying upfront gives a cleaner break-even month. The calculator models both.