Refinance Break-Even Calculator
Calculate when refinancing your mortgage becomes worth it.
Last updated: June 13, 2026
Calculator
Results
After closing costs
How to Use This Calculator
- 1Enter your current monthly payment.
- 2Enter your new monthly payment after refinancing.
- 3Enter the total closing costs of the refinance.
- 4View your break-even point in months and total savings over the remaining term.
Formula Explanation
The break-even point is when cumulative monthly savings from the lower payment equal the upfront closing costs of refinancing.
Variables:
Worked Examples
$1,800 → $1,550/month, $6,000 closing costs
- 1. Monthly savings = $1,800 - $1,550 = $250
- 2. Break-even = $6,000 ÷ $250 = 24 months
- 3. If 25 years remain: total savings = $250 × 300 - $6,000 = $69,000
Why Use This Calculator
- Know exactly when refinancing becomes profitable.
- Make data-driven refinancing decisions.
- Accounts for total savings over the remaining term.
- Prevents refinancing when it does not make financial sense.
Tips & Best Practices
- Refinancing usually makes sense if you will stay past the break-even point.
- Consider the new loan term — refinancing to a new 30-year extends your debt.
- Negotiate closing costs — they are often flexible.
- Factor in whether you are restarting the amortization clock with a new loan.
Common Mistakes to Avoid
❌ Only comparing monthly payments without considering closing costs.
✅ A lower payment means nothing if closing costs take 5+ years to recoup and you plan to sell in 3.
❌ Ignoring the new loan term.
✅ Refinancing a 25-year remaining mortgage into a new 30-year lowers payments but adds 5 years of interest.
Frequently Asked Questions
When does it make sense to refinance?
What are typical refinance closing costs?
Should I refinance to a shorter term?
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<iframe src="https://redicalc.com/embed/finance/refinance-break-even-calculator" width="100%" height="600" style="border:none;border-radius:12px;box-shadow:0 1px 3px rgba(0,0,0,0.1);" title="Refinance Break-Even Calculator — RediCalc.com" loading="lazy" allowtransparency="true"></iframe>Disclaimer: This calculator is provided for informational and educational purposes only. Results are estimates and should not be used as a substitute for professional advice. RediCalc.com makes no guarantees regarding the accuracy, completeness, or suitability of any calculations. Always consult a qualified professional before making financial, health, construction, or other important decisions.
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