📖 Overview
Use this calculator to check if refinancing aligns with how long you plan to keep the loan.
🧪 Example Scenarios
Use these default and higher-pressure example inputs to explore how sensitive this calculator is before using your real numbers.
| Input | Base Case | Higher Pressure Case |
|---|---|---|
| Closing Costs ($) | 6,500 | 7,800 |
| Current Monthly Payment ($) | 2,750 | 3,162 |
| New Monthly Payment ($) | 2,350 | 2,703 |
⚙️ 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 |
When To Use This
- Use this tool when you need a fast decision during active planning or execution.
- Use this before committing money, time, or tradeoffs that are hard to reverse.
- Use this to compare options using the same assumptions across scenarios.
Edge Cases To Watch
- Results can be misleading if key inputs are missing, stale, or unrealistic.
- Very small or very large values may amplify rounding effects and interpretation risk.
- If assumptions change mid-decision, recalculate before acting.
Practical Tips
💡 Use realistic closing costs from lender disclosures.
💡 If you may move soon, break-even timing is critical.
💡 Run a best-case, base-case, and worst-case scenario before deciding.
💡 Use recent real values, not ideal assumptions, for better accuracy.
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.