# Refinance Break-Even Calculator

URL: https://speedycalculator.com/calculators/finance/refinance-break-even/
Last updated: 2026-10-25

> The refinance break-even calculator works out how many months it takes for the savings from a lower-rate mortgage to cover the closing costs of refinancing – and the date you break even – including the difference in principal paydown.

## Inputs

- Current balance
- Current rate (%)
- Months left on the current loan
- New rate (%)
- New term (years, months)
- Closing costs
- Refinance date

## Results

- Current payment
- New payment
- Monthly savings
- Break-even
- Break-even date
- Break-even in years

## Formula

```
Monthly saving = current payment − new payment
Simple break-even = closing costs ÷ monthly saving
True break-even: first month where (payment savings + extra principal repaid) ≥ closing costs
```

## Explanation

If you plan to move before the break-even date, refinancing loses money. A no-closing-cost refinance raises the rate instead – compare both.

### How to use the Refinance Break-Even Calculator

- **Current balance**
- **Current rate**
- **Months left on the current loan**
- **New rate**
- **New term**
- **Closing costs**
- **Refinance date**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter the current balance, current rate and months left, the new rate and term, and the closing costs.

### Tips

- Compare loans by APR and total cost, not just the monthly payment.
- Extra payments go straight to principal and can save a lot of interest.
- Pay off the highest-rate debt first if you want to save the most money.
- Check for prepayment penalties before paying a loan off early.

### Common mistakes to avoid

- Stretching a loan term to lower the payment without seeing the extra interest.
- Paying only the minimum on credit cards.
- Forgetting fees that are rolled into the loan.

### Inputs explained

FieldWhat to enterCurrent balanceAmount in your currencyCurrent rateIn %Months left on the current loanA numberNew rateIn %New termUnits: years, monthsClosing costsAmount in your currencyRefinance dateA date

### What each result means

- **Current payment** = pmt([Current rate]÷1200, [Months left on the current loan], [Current balance])
- **New payment** = pmt([New rate]÷1200, [New term], [Current balance])
- **Monthly savings** = [Current payment] - [New payment]
- **Break-even date** = addmonths([Refinance date], [Break-even])
- **Break-even in years** = [Break-even]÷12

### Example values

How the main result changes when **Current balance** changes and everything else stays at the example values above:

Current balanceBreak-even (months)150,00050225,00033300,00025375,00020450,00017600,00012

## Worked example

Inputs — Current balance: $300,000; Current rate: 7 %; Months left on the current loan: 336; New rate: 6 %; New term: 30 years; Closing costs: $6,000; Refinance date: 2026-10-25.

Results — Current payment = $2,038.83; New payment = $1,798.65; Monthly savings = $240.17; **Break-even = 25 months**; Break-even date = Sat, November 25, 2028; Break-even in years = 2.1.

## FAQ

**What is the refinance break-even point?**
The time it takes for monthly savings to repay the closing costs.

**What is a good break-even period?**
Shorter than the time you expect to stay in the home – ideally under 2–3 years.

**Do I need to include the lower interest?**
The monthly saving already reflects the lower rate.

**What formula does the Refinance Break-Even Calculator use?**
Monthly saving = current payment − new payment.


## Sources

- [Consumer Financial Protection Bureau](https://www.consumerfinance.gov/)