Refinance Break-Even Calculator
Compare current and new mortgage payments, closing costs, points, break-even months, and total interest.
Last reviewed: June 2026Current Loan
New Loan
What this refinance break-even calculator estimates
This refinance break-even calculator compares the principal-and-interest path of your current mortgage with a proposed new mortgage. It calculates the current payment from the remaining balance, current rate, and years remaining, then calculates the new payment from the proposed rate, term, closing costs, points, and whether those costs are paid upfront or rolled into the new loan.
The core break-even calculation is upfront refinance costs divided by monthly principal-and-interest savings. If the monthly payment does not fall, the calculator reports that there is no monthly-payment break-even. If costs are rolled into the loan, the calculator reports that the costs are rolled in because the cash-upfront break-even question no longer applies.
What the outputs mean
- Current payment: modeled monthly principal and interest on the remaining current loan path.
- New payment: modeled monthly principal and interest on the proposed refinance loan.
- Monthly savings: current payment minus new payment. A negative value means the new payment is higher.
- Break-even point: months needed for monthly savings to recover upfront closing costs and points.
- Total interest and total cost: estimated remaining principal-and-interest cost over each path, not a full escrow or tax analysis.
Worked examples
With the default inputs, the current $280,000 loan at 7.0% with 27 years remaining has a modeled principal-and-interest payment of $1,925.88. The new 30-year loan at 5.75% has a modeled payment of $1,634.00. With $6,000 in upfront costs, monthly savings are $291.88, so the break-even point is 21 months and the modeled lifetime savings are $29,744.
For a $350,000 balance at 6.5% with 25 years remaining, refinancing to 5.875% for 25 years with $7,500 in closing costs and 1 point gives a modeled monthly saving of $134.84. The break-even point is 82 months, which is long enough that the decision depends heavily on how long you expect to keep the loan.
If those same costs are rolled into the new loan, the modeled new payment rises to $2,298.42 and the monthly saving falls to $64.80. The calculator reports no cash-upfront break-even because the costs are financed, but the total-cost comparison still shows whether the refinance path is lower over the modeled term.
Important refinance caveats
- Principal and interest only: property tax, homeowners insurance, HOA dues, mortgage insurance, and escrow shortages can change independently of the loan rate.
- Points are not always worth it: CFPB guidance notes that points trade higher upfront costs for a lower rate, so time horizon matters.
- No-cost does not mean free: lender credits or rolled costs can raise the rate, balance, or long-term cost.
- Term resets matter: refinancing from 27 years remaining to a new 30-year term can lower the payment while stretching repayment.
- Use Loan Estimates: compare official lender disclosures, APR, points, lender credits, cash to close, and prepayment terms before signing.
Sources and further reading
For refinance tradeoffs, see the CFPB handout Should I refinance?, its explanation of no-cost and no-closing-cost refinancing, its guide to points and lender credits, and the CFPB mortgage glossary entry for mortgage refinance and closing costs.
Frequently Asked Questions
Refinance break-even quick reference
| Output | Meaning |
|---|---|
| Monthly savings | Current modeled principal-and-interest payment minus new modeled payment. |
| Break-even point | Months for monthly savings to recover upfront closing costs and points. |
| Net savings | Modeled remaining total-cost difference after refinance costs. |
| Comparison table | Month-by-month cash recovery view when upfront costs are paid out of pocket. |