Refinance Break-Even Calculator
Every refinance has a month where it stops being an expense. This one identifies yours.
What This Calculator Does
The arithmetic is simple — cost of the refinance divided by monthly saving — and this tool runs it on your figures rather than on an example: old payment, new payment, closing costs. The resulting month is then measured against how long you intend to hold the property.
Who Is This For
Owners holding a lender's refinance offer, buyers who expect to be gone within a few years, and anyone who wants a straightforward pass-or-fail test before paying closing costs a second time.
How It Works
Type in the payment you make today, the payment you have been quoted, and your estimated closing costs. Add the number of years you expect to remain in the home, and the calculator says whether break-even arrives before you leave.
Frequently Asked Questions
How is break-even worked out?
Divide total closing costs by the monthly saving and you have the months required to recover the spend. To illustrate: $6,000 of costs against $200 saved each month breaks even at month 30. Everything past that is profit; leaving earlier is a loss.
What if the costs go into the loan?
Rolling them in spares your cash today, but the costs remain — as a larger balance and additional interest. Break-even does not vanish, it relocates from your bank account into the mortgage. Run the comparison with the costs counted either way.
Does a shorter term change things?
It does, frequently in reverse. Moving from a 30-year to a 15-year term normally lifts the monthly payment, so there is no monthly saving to divide into the closing costs. The reward there is lifetime interest rather than break-even months — judge that refinance on total interest saved.
What if a move is possible?
Sell before break-even and the refinance has cost you money. Miami owners with seasonal patterns, a possible relocation, or a home that could become a rental should be conservative with the holding-period figure — the shorter the realistic horizon, the higher the bar a refinance has to clear.
Do closing costs differ by lender?
Considerably. Origination fees, title charges, and points vary from lender to lender on identical loans, and refinance closing costs commonly sit anywhere across the 2-6% of loan amount range. Gather Loan Estimates from several and line up the same rows.