Refinance & Break-Even Calculator
See if a refinance makes sense by comparing your current loan to a new one. We’ll estimate your monthly savings, break-even time, and interest savings over your time horizon.
Enter your current balance, remaining term, and rate—then try a new term and rate. Add closing costs and discount points and choose whether to roll them into the loan. Results update instantly.
Current loan
New loan
Assumptions
Key results
Remaining balance (first 7 years)
Amortization: first 12 months
How to use the Refinance & Breakeven Calculator
- Enter your current loan details: balance, rate (APR), original term, and either months paid or months remaining.
- Enter the proposed loan: new rate, new term, and whether you’ll finance or pay at closing the estimated costs.
- Add points (if any) and typical closing costs (title, appraisal, lender fees).
- Optional: include taxes/insurance/PMI if you want an “all-in” monthly comparison.
- Review the breakeven months, monthly savings, and total interest comparison. Adjust inputs to test scenarios.
Understanding your results
- Monthly payment (old vs. new): Compares principal & interest, with optional escrow/PMI items if provided.
- Breakeven months: Refi costs ÷ Monthly savings. If you’ll keep the loan longer than this, the refi likely “pays for itself.”
- Total interest: Compares interest paid over each loan’s remaining life, given your selected terms and assumptions.
- Remaining balance chart: Helps visualize amortization—how fast the balance falls under each scenario.
- Cost handling: Shows whether you financed costs (raising the new balance) or paid them at closing.
What is a refinance breakeven point?
The breakeven point is when your cumulative monthly savings from the new loan equal the upfront refinance costs. A quick estimate is:
Breakeven months = Total refinance costs ÷ Monthly payment savings
Example: If costs are $4,000 and the new loan saves $150/month, breakeven is about 26–27 months. If you plan to keep the loan longer than that, the refi may be worthwhile.
Factors that influence your breakeven
Closing costs
Appraisal, title/escrow, lender fees, and points increase breakeven months. Financing costs raises the new balance and total interest but lowers cash due at closing.
Rate change
A larger drop in APR usually boosts monthly savings and shortens breakeven. Even 0.25% can matter on larger balances.
Term selection
Restarting a 30-year term lowers the payment but can increase lifetime interest. Shorter terms raise the payment but may slash total interest.
Points
Paying points buys down the rate. Points pay off only if you keep the loan past their own breakeven.
Cash-out
Increasing the loan amount changes LTV and pricing. Consider your goal (lower rate vs. accessing equity) and compare total interest carefully.
PMI & taxes
If your LTV or loan type changes, PMI requirements can change too. Property taxes and insurance don’t affect P&I savings but change the all-in payment picture.
Is refinancing worth it?
Often makes sense when…
- Your breakeven is well inside your expected time in the home.
- You can shorten the term without stressing your budget.
- You’re dropping costly PMI or moving from an ARM to a stable fixed rate.
Be cautious if…
- You’ll likely move or refi again before breakeven.
- You’re resetting to a much longer term and will pay more total interest.
- Cash-out raises your balance and LTV, increasing pricing or PMI.
Explore other refinance scenarios
Refinance glossary
- Breakeven point
- Months until savings from the new payment equal upfront costs.
- Closing costs
- Appraisal, title/escrow, lender fees, recording, and optional points.
- Discount points
- Upfront fees that buy a lower interest rate; value depends on how long you’ll keep the loan.
- LTV (loan-to-value)
- Loan amount ÷ property value; affects pricing and PMI requirements.
Frequently Asked Questions
When is the best time to refinance?
When rates are meaningfully lower than your current APR, your credit/income support approval, and your planned time in the home exceeds the breakeven timeline.
What are typical refinance costs?
Many loans run roughly 2–5% of the amount refinanced, including lender, title/escrow, appraisal, recording, and optional points. Costs vary by market and loan type.
How often can I refinance?
There’s usually no hard limit, but lenders may have seasoning rules, and you should consider the cost and whether you’ll reach breakeven.
Should I roll costs into the new loan?
Rolling costs increases the balance and total interest but lowers cash due at closing. Compare both paths in the calculator to see the trade-offs.