Mortgage

Refinance Break-Even Calculator

Estimate how long it may take monthly savings from a refinance to recover closing costs.

Current monthly payment

New monthly payment

Closing costs

Estimated monthly savings

$250.00

Current payment minus new estimated payment.

Break-even time

24 months

About 2 years to recover closing costs.

Formula, assumptions, and limits

Formula used

The calculator divides closing costs by monthly savings. Monthly savings equals current payment minus new payment.

Important limits

This estimate does not include loan balance changes, taxes, escrow, points, opportunity cost, term reset, or full amortization effects.

Eerns calculators are for educational estimates only and are not financial, tax, legal, or investment advice. Results depend on the information entered and may not reflect a full situation.

How to use it

Use this calculator to compare current and new monthly payments against closing costs to estimate a simple break-even point.

Calculation method

The calculator divides closing costs by monthly savings. Monthly savings equals current payment minus new payment.

Important limitation

This estimate does not include loan balance changes, taxes, escrow, points, opportunity cost, term reset, or full amortization effects.

Example scenario

If a refinance saves $250 per month and costs $6,000 to close, the simple break-even estimate is 24 months.

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Default professional blue header with a white calculator area.

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Common questions

Frequently asked questions

What is a refinance break-even point?

It is the estimated time needed for monthly savings to recover the upfront closing costs of refinancing.

Why is this only a simple estimate?

A full refinance analysis should also consider loan balance, term reset, interest over time, points, escrow, tax effects, and how long you plan to keep the loan.

What if the new payment is higher?

If the new payment is not lower, the calculator cannot show a monthly-savings break-even point.

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