Find the month your refinance starts paying you back.
Enter your loan and both rates. See your new payment, how much you save each month, the exact month the savings clear your closing costs, and the honest catch: whether a lower payment on a longer term quietly costs you more interest in the end.
Your refinance
Is this refinance worth it?
Savings vs cost over time
When savings clear the closing cost
Lifetime interest: old loan vs new loan
The refinance at a glance
Your net position, year by year
Gross savings is the payment cut times the months elapsed. Net position subtracts the closing costs. It turns positive the month you break even.
| After | Payments saved | Gross savings | Closing costs | Net position |
|---|
How refinance break-even works
Refinance Break-Even Math
Closing costs divided by monthly savings = months to recoup. If you stay past break-even, you profit. If you sell or refinance again before break-even, you lose money on the refi.
Stay-Time Rule
Plan to stay at least 2× the break-even period. If break-even is 36 months, stay 72+ for clear win. Anything shorter is marginal.
Beyond Monthly Savings
Refinance can also: shorten loan term (30 to 15 year), drop PMI, cash-out equity, switch from ARM to fixed. Pure rate-and-term refi is just one use case.
Rolling Closing Costs
Many lenders let you add closing costs to loan balance instead of paying upfront. Monthly savings decrease slightly but no out-of-pocket cost. Break-even changes accordingly.
Common questions
What's a good break-even period?
Under 24 months is excellent. 24-48 months acceptable if staying long-term. Over 48 months questionable.
Should I roll closing costs into loan?
Reduces out-of-pocket but slightly raises monthly payment. Calculate break-even both ways. Often better to pay upfront if you have the cash.
What if I might sell soon?
Don't refinance. Break-even periods rarely under 12 months. Selling before break-even guarantees loss.
Does this include tax effects?
No, interest on smaller loan means smaller deduction. Effect is small for most. High-income borrowers should adjust.
What's a 'no-cost' refinance?
Lender pays closing costs but charges slightly higher rate. Math still needs to work, calculate effective break-even at the higher rate.
Estimates for planning only. This compares principal and interest on the balance you enter and ignores taxes, mortgage insurance and any escrow changes. A real quote also depends on your exact rate, points, day-count method and lender fees. Confirm the numbers with your lender before you rely on them.