Mortgage Refinance Break-Even Calculator
Find out how many months it takes to recoup your closing costs after refinancing, and your true lifetime savings.
Understanding your refinance break-even point
Refinancing replaces your current mortgage with a new one, usually to secure a lower interest rate and monthly payment. But refinancing has a cost — closing costs such as origination, appraisal, title, and recording fees, often a few thousand dollars. The break-even point tells you how long you have to keep the new loan before the monthly savings outweigh those costs.
The math is straightforward: break-even months = closing costs ÷ the monthly payment reduction. For example, if a refinance costs $4,000 and lowers your payment by $200 a month, you break even in 20 months. Stay in the home past that point and the refinance starts saving you money net of costs; move, sell, or refinance again before then and you may not recoup what you paid. This calculator also estimates your lifetime savings by comparing the remaining interest on your current loan against the new loan, net of costs.
One important caveat: a lower rate does not automatically mean lower lifetime cost. If you refinance into a fresh 30-year term after already paying down several years of your old loan, you reset the clock and stretch the balance over more years — which can raise total interest even at a lower rate. Look at lifetime interest, not just the monthly payment. Rolling closing costs into the new balance avoids paying out of pocket but means you finance those costs and push out your break-even. Enter your numbers above to see your break-even month and true savings for your situation.