Refinance Break-Even Calculator
Refinancing only wins if you stay put long enough to cover the closing costs. This calculator gives you the break-even month so you can compare it with your plans.
Moving before break-even usually means the refinance lost money, no matter how good the new rate looked.
Results update as you type.
How it works
Monthly saving = current payment − new payment. Break-even months = closing costs ÷ monthly saving. That is the whole calculation, deliberately undiscounted: a dollar saved in month 30 is treated the same as a dollar saved in month 3.
Net after 5 years = (monthly saving × 60) − closing costs. It answers the question break-even alone cannot: if you stay the full five years, is the deal actually worth it after the costs?
If the new payment is not lower, there is nothing to break even on and the calculator flags the inputs instead of dividing by zero. Costs paid later (a lender credit, or a higher balance) still belong in the closing-costs box, because they are still money you pay.
Example
$4,500 closing costs · payment falls from $2,160 to $1,890
- Monthly saving: $270.
- Break-even: 1 yr 5 mo (16.7 months).
- Net after 5 years: +$11,700.
- If you sell at 12 months instead, you are roughly $1,260 short of covering the costs.
Worked example using the figures above — an illustration, not financial advice. Your loan documents decide the real numbers.
Refinance Break-Even Calculator FAQ
How do I calculate break-even on a refinance?
Divide the total closing costs by the drop in your monthly payment. With $4,500 of costs and a payment that falls $270, you break even in 16.7 months.
What is a good break-even point for refinancing?
Under 24 months is comfortable if you expect to stay five years or longer. Past 36 months the deal depends on certainty about staying put, which most people overestimate.
What happens if I sell before break-even?
You lose the costs you have not recouped yet, so treat break-even as the minimum time you must stay. A safer test is to require your planned stay to be about 1.5 times the break-even month.
Are closing costs the only cost to include?
No. Put prepayment penalties, title insurance, appraisal and any points you pay to buy down the rate into the same number. Escrow and prepaid interest get re-collected rather than added, so leave them out.
Does dropping PMI count as savings?
Yes — count it in the payment drop. If more equity removes $95 a month of mortgage insurance, that is $95 a month saved from month one, and it pulls your break-even closer.
What about a no-cost refinance?
A no-cost refinance does not remove the cost, it moves it — usually into a higher rate or a bigger balance. There is no up-front figure left to divide, so run the calculation with the lender credit added back to see what you really paid for the rate.
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Last updated October 4, 2026. Every figure is an estimate produced in your browser — see the methodology and its limits.