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
| Field | What to enter |
|---|---|
| Current balance | Amount in your currency |
| Current rate | In % |
| Months left on the current loan | A number |
| New rate | In % |
| New term | Units: years, months |
| Closing costs | Amount in your currency |
| Refinance date | A 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 balance | Break-even (months) |
|---|---|
| 150,000 | 50 |
| 225,000 | 33 |
| 300,000 | 25 |
| 375,000 | 20 |
| 450,000 | 17 |
| 600,000 | 12 |
Formula
Monthly saving = current payment − new paymentSimple break-even = closing costs ÷ monthly savingTrue break-even: first month where (payment savings + extra principal repaid) ≥ closing costsWorked 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.
Frequently asked questions
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.