Mortgage Refinance Break-Even Calculator
A lower rate only pays off once the monthly savings have covered what you spent to refinance. This shows the break-even month, your net savings by the time you expect to sell or refinance again, and the interest on each loan so a reset 30-year term does not hide extra cost.
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How it works
Payments use the standard amortization formula P = L x r / (1 - (1 + r)^-n) with r = rate / 12. Monthly savings = current payment - new payment. Break-even months = closing costs / monthly savings, rounded up, the method in the Federal Reserve's A Consumer's Guide to Mortgage Refinancings. Net savings by your planned date = monthly savings x months kept - closing costs. Interest = payment x months - balance for each loan.
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FAQ
What is a good break-even time?
If you expect to keep the home and loan well past the break-even month, refinancing usually makes sense on cost alone.
Why can total paid go up even with savings?
A new 30-year term restarts the clock, so you may pay more interest overall. The last result line shows that change.
Should I roll closing costs into the loan?
That raises the balance and the payment. Enter the higher balance and zero costs to compare.
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Estimates, not tax or financial advice. Check important numbers with a qualified professional.