Refinance Break-Even Calculator: Is a Refi Worth It?

Q: What's a refinance break-even?

The break-even month is when cumulative monthly savings from the new loan finally equal the closing costs you paid to refinance. After that month, the refi starts putting money back in your pocket. Sell or pay off before that point and you lose money on the deal.

Q: Why does a lower rate sometimes cost me more?

Because stretching a 22-year remaining loan into a fresh 30-year loan adds 8 years of interest payments. Even at a lower rate, the extra years can outweigh the rate drop. A calculator that only shows monthly savings will miss this. We show lifetime net impact too.

Q: How much should closing costs be?

The CFPB cites 2 to 5 percent of the new loan amount as the typical range. On a $300,000 refinance, expect $6,000 to $15,000 in closing costs including origination, title, appraisal, escrow setup, and any discount points.

Q: Should I refinance to a shorter term?

If the higher monthly payment fits your budget, a 15-year refi can save enormous lifetime interest compared to extending to 30. Run both scenarios in the calculator. The monthly will be higher, but the lifetime net is almost always strongly positive.

Enter your current loan and the new rate. We show the break-even month, the lifetime interest impact after closing costs, and an honest verdict that flags the monthly-win-lifetime-loss trap most calculators hide.

Your current loan

Current balance

Remaining principal, not the original loan amount.

Current rate (%)

Your existing APR.

Years remaining on current loan

If you started a 30-year mortgage 5 years ago, you have 25 left.

The new loan you are considering

New rate (%)

The quoted rate from the Loan Estimate.

New term

Fresh term clock starts at closing.

Closing costs ($)

CFPB typical range is 2–5% of the new loan. Get this from the lender’s Loan Estimate, page 2.

How long do you plan to stay in the home?

7 years

If you sell or pay off before break-even, the refi costs you money. This is the single most important input.

Break-even in

Current loan

Monthly payment-

Remaining interest-

Time left-

New loan

Monthly payment-

Total interest-

New term-

Monthly savings

Lifetime net impact

Verdict

Show new-loan amortization (first 12 and last 12 months)

Month	Payment	Principal	Interest	Balance

Estimates only. Not financial advice. Rates, closing costs, and lender fees change daily. Pull a real Loan Estimate from two or three lenders and compare. See our full disclaimer and the methodology.

Refi -

What this calculator gets right that others miss

Most online refinance calculators give you a monthly savings number and a break-even month, then declare victory. That's fine math, but it hides the harder truth. A lower rate doesn't always mean lower lifetime cost. If you've been paying on a 30-year mortgage for 5 years and you refinance into a fresh 30, you just added 5 years of interest payments. The rate drop has to be big enough to outweigh that. Sometimes it is. Often it isn't.

We show both numbers. Break-even month. Lifetime net impact after closing costs. And a verdict chip that tells you "Yes", "Maybe", or "No" based on how long you're actually staying in the home. Read the full methodology for the formula and sources.

Common questions

What's a refinance break-even?

It's the month when your cumulative monthly savings from the new loan finally equal the closing costs you paid to refinance. After that, the refi starts making you money. Sell the house or pay off the mortgage before that point and you lose money on the deal. The break-even month is the single most important number in a refi decision.

Why does a lower rate sometimes cost me more?

Because stretching a 25-year remaining loan into a fresh 30-year adds five years of interest. Even at a lower rate, the extra years can outweigh the rate drop. A 7.0% loan with 25 years left often has lower lifetime interest than a 6.0% refi that restarts the clock at 30. A calculator that only shows monthly savings hides this. Ours doesn't.

How much should closing costs be?

The CFPB cites 2 to 5 percent of the new loan amount as typical. On a $300,000 refi that's roughly $6,000 to $15,000. Expect origination fee, title insurance, appraisal ($500–$700), escrow setup, recording fees, and any discount points. Every lender is required to give you a Loan Estimate inside three business days of application. Compare page 2 from three lenders before you pick one.

Should I refinance to a shorter term?

If you can comfortably afford the higher monthly payment, yes. Refinancing a 25-year remaining 7% loan into a 15-year at 6.25% typically saves six figures in lifetime interest even after closing costs. Run the numbers in both directions. The sticker shock of the higher payment fades when you see what you're keeping in the house instead of sending to the lender.

See the full FAQ →