Refinance Break-Even Calculator: When to Refinance Your Mortgage
Should you refinance? Our Refinance Break-Even Calculator tells you exactly how many months to recover closing costs — and if it’s worth it. Compare current vs new loan, see monthly savings, and get a 5-year projection.
What is Break-Even?
Break-even = Closing Costs ÷ Monthly Savings
Example: $5,000 costs, $150/month saved → 33 months (2.75 years)
How to Use
- Enter current balance, rate, remaining term
- Input new rate, term, and closing costs
- Get instant break-even + savings
Closing Costs Breakdown
- Origination: 0.5–1%
- Appraisal: $300–500
- Title: $700–1500
- Recording: $100–300
- Total: 2–5% of loan
Rate vs Term Trade-off
- Lower Rate: Save on interest
- Shorter Term: Pay off faster
- Longer Term: Lower EMI, more interest
Break-Even Examples
| Costs | Savings/Mo | Break-Even |
|---|---|---|
| $3,000 | $100 | 30 months |
| $6,000 | $200 | 30 months |
| $4,000 | $150 | 27 months |
When to Refinance
- Rate drop ≥ 0.5–1%
- Staying in home > break-even
- Switching from ARM to fixed
- Removing PMI (20% equity)
When NOT to Refinance
- Moving in < 2 years
- High closing costs
- Credit score dropped
- Near end of loan
Cash-Out Refinance
Tap equity for home improvement. But increases loan amount → longer break-even.
No-Closing-Cost Refinance
Roll fees into loan or accept higher rate. Break-even = 0 months, but pay more long-term.
Pro Tips
- Shop 3–5 lenders
- Lock rate for 30–60 days
- Check credit before applying
- Time for spring/fall rate dips
Pair with Other Tools
See full schedule? Use Amortization Schedule. Compare loans? Try Loan Comparison.
Conclusion
Refinancing can save thousands — if timed right. Use our Refinance Break-Even Calculator to make smart decisions. Explore more in Finance Calculators.