Personal financeHow this is calculated Common questions
Mortgage refinance break-even calculator
Compare your current mortgage with a new rate and term to see the monthly saving, the break-even point on closing costs, your net position after five years and the change in lifetime interest.
Tool
Mortgage refinance break-even calculator
How many months it takes for a refinance to pay for its own closing costs.
Break-even
21 months
Saving $251.09 a month after closing costs
Payment now$2,149.12/mo
Payment after refinancing$1,898.04/mo
Net position after 5 years$9,865
Lifetime interest change-$7,822
Both payments use the standard amortising loan formula. Break-even is closing costs divided by the monthly saving. The lifetime figure compares total interest on the remaining term with total interest on the new term plus the closing costs.
- The balance being refinanced is the same; no cash is taken out.
- Closing costs are paid up front rather than rolled into the loan.
- Both rates are fixed for their full terms.
- When is refinancing worth it?
- When you will stay in the home well past the break-even month. On a $320,000 balance, moving from 6.75% to 5.9% with $5,200 in costs breaks even in roughly 19 months.
- Does a lower rate always save money overall?
- No. Resetting a 27-year loan to a fresh 30-year term can lower the payment while adding interest across the life of the loan — the lifetime line shows which way it lands.