📖 Overview
Use this calculator to check if refinancing aligns with how long you plan to keep the loan.
⚙️ How It Works
This estimates how long it takes monthly payment savings to recover refinance closing costs.
The Formula
Break-Even Months = Closing Costs ÷ Monthly Payment Savings
| Closing Costs | Total fees paid to complete the refinance (typically 2–5% of loan) |
| Monthly Savings | Difference between old and new monthly payment |
💡Refinancing makes financial sense if you plan to stay in the home past the break-even point. If you expect to move within 2–3 years, savings may not justify the upfront cost.
Quick Reference
| Closing Costs | $100/mo saved | $200/mo saved | $300/mo saved |
|---|---|---|---|
| $3,000 | 30 months | 15 months | 10 months |
| $5,000 | 50 months | 25 months | 17 months |
| $8,000 | 80 months | 40 months | 27 months |
| $12,000 | 120 months | 60 months | 40 months |
Practical Tips
💡 Use realistic closing costs from lender disclosures.
💡 If you may move soon, break-even timing is critical.
Frequently Asked Questions
❓ What if new payment is not lower?
Then there is no financial break-even from payment savings alone.
❓ Should I include non-payment benefits?
Yes, term and risk changes can matter beyond monthly savings.