Break-Even Refinance Calculator
Find out how long it takes for refinance savings to exceed closing costs.
Break-Even Point
25 months (2.1 years)
1-Year Savings
-$2,600
5-Year Savings
$7,000
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What it does: Calculates how many months it takes for your monthly refinance savings to equal your closing costs — the break-even point.
When to use: Use this when you already know your expected monthly savings and closing costs and want a quick break-even calculation to decide if refinancing pays off.
How to use: Enter your expected monthly savings (the difference between your current and new payment) and your estimated closing costs. The calculator shows the break-even in months and years, plus 1-year and 5-year net savings.
Key Inputs Explained
Worked Example
Monthly savings $200, closing costs $5,000. Break-even = 25 months (2.1 years). 1-year savings = $200 x 12 - $5,000 = -$2,600 (still behind). 5-year savings = $200 x 60 - $5,000 = $7,000 (ahead).
Assumptions & limitations: This calculator assumes your monthly savings remain constant. If you refinance to a shorter term, your payment may increase but you save on total interest — that is a different calculation not captured here.
Calculator FAQs
What break-even is considered good?
Generally, a break-even of 24 months or less is considered favorable. If you plan to stay in the home beyond the break-even, the refinance pays off.
What if I sell before the break-even?
You lose money on the refinance — your closing costs exceed your savings. This is why the break-even is the key metric for the refinance decision.
Does this account for the interest I save over the life of the loan?
No. This calculator only looks at monthly cash flow. For total interest savings, use the Refinance Calculator which compares total interest over the life of each loan.
Should I include discount points in closing costs?
Yes. Points are part of your closing costs. If you buy points to lower your rate, include the point cost in the closing costs field and the resulting lower payment in the monthly savings.