Find how long a refinance takes to pay back its closing costs.
Please do not make financial decisions based on these results.
What is the Refinance Break-Even Calculator?
Find how long a refinance takes to pay back its closing costs. To use the Refinance Break-Even Calculator, enter balance, current rate, new rate, years left, closing costs; it returns monthly savings, break-even (months), savings over remaining term, and shows them instantly as you type.
Where the Refinance Break-Even Calculator fits
Find how long a refinance takes to pay back its closing costs. The main figure it returns is the Monthly savings, worked out from the values you enter.
It belongs with the other loans & debt tools. If you are comparing options or checking a result from another angle, try the Payment Calculator, Loan Repayment Calculator or the Credit Card Calculator.
How to use the Refinance Break-Even Calculator
- Enter your numbers. Start with Balance ($), Current rate (%), New rate (%), then fill in Years left, Closing costs ($). Take the rate and term from your loan offer. Fees and the rate type change the result. Fields marked optional can stay at zero.
- Read the result. The highlighted box gives the Monthly savings, and the cards below show Break-even (months), Savings over remaining term. Tables and charts break it down further.
- Test other scenarios. Results update as you type. Change one value at a time to see what drives the answer, and press Reset to go back to the defaults.
Formula and how it works
Example with real numbers
Here is the Refinance Break-Even Calculator using the default values shown in the calculator above:
Inputs
| Balance ($) | 300,000 |
|---|---|
| Current rate (%) | 7.2 |
| New rate (%) | 6.2 |
| Years left | 27 |
| Closing costs ($) | 5,500 |
Results
| Monthly savings | $193.13 |
|---|---|
| Break-even (months) | 28 |
| Savings over remaining term | $57,074.27 |
With these inputs the calculator returns Monthly savings: $193.13. Change any value in the calculator to see how the result moves.
What if you change one input?
Sensitivity check: raising Balance ($) from 300,000 to 360,000 (about 20% higher) and leaving everything else as in the example above changes the results like this:
| Result | Example | After the change | Change |
|---|---|---|---|
| Monthly savings | $193.13 | $231.76 | +20% |
| Break-even (months) | 28 | 24 | -16.7% |
| Savings over remaining term | $57,074.27 | $69,589.12 | +21.9% |
The input that moves the result most is the one to check twice. Change it in the calculator above to test your own case.
What the results tell you
The results panel of the Refinance Break-Even Calculator reports Monthly savings, break-even (months) and savings over remaining term. Compare these figures while changing one input at a time, and use the related calculators below to look at the same situation from another angle.
Method and limits. This calculator applies the formula in the section above to your inputs, in your browser; nothing you enter is stored on our servers. Your lender’s offer is the final word: fees, rate type and rounding differ between lenders. It is for information, not financial, tax or legal advice.
Frequently asked questions
When does refinancing make sense?
When you will stay in the home past the break-even point.
How can I pay off a loan faster?
Pay more than the required amount, add extra yearly or one-time payments, or switch to biweekly payments. Make sure extra payments go to principal.
What is APR and why does it matter?
APR is the yearly cost of a loan including fees. Use it, rather than the interest rate alone, to compare offers.
Are the results guaranteed?
No. Results depend entirely on the numbers you enter and the formulas shown on this page. Please do not make financial decisions based on them alone; confirm important figures with a licensed professional.
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