Refinance break-even calculator

Frequently asked questions

What is the break-even point on a refinance?

The number of months it takes for monthly payment savings to recover the refinance's upfront closing costs. If closing costs are $4,800 and the new payment saves $200 per month, break-even is 24 months.

Should I refinance if I plan to move before break-even?

Generally no. You won't hold the loan long enough to recoup the upfront costs, so the refinance loses money in net terms. Break-even only makes financial sense when you plan to stay past that point.

What costs does this include?

The tool uses total upfront refinance costs you enter (origination fees, title insurance, appraisal, and similar) and divides by the estimated monthly payment savings. It does not model tax effects, changes in total interest over the life of the loan, or cash-out refinance benefits.

Is a lower rate alone a reason to refinance?

Not by itself. A lower rate only helps if the monthly savings are large enough to clear the closing costs within your expected hold period. Rate drops of less than 0.5% often fail that test after fees.