Finance Tools

Refinance Break-Even Calculator

Calculate when refinancing your mortgage pays off

Current Loan Details

Enter your existing mortgage information

$

Remaining principal on your mortgage

%
years
$

Principal & Interest only

New Loan Details

Enter the refinance loan terms

%
years
$

Total fees for refinancing

$
Quick Scenarios

Loan Comparison

Side-by-side analysis of current vs. new loan

⚠️ No calculation yet
Calculate break-even in the Calculator tab first

Visual Analysis

Charts showing savings over time

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Calculate break-even in the Calculator tab first

Amortization Schedules

Detailed payment breakdown over time

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Calculate break-even in the Calculator tab first

Refinancing Guide

Formulas, tips, and when to refinance

Break-Even Formula
Break-Even Months = Closing Costs ÷ Monthly Savings
Monthly Payment Formula
M = P × [r(1+r)ⁿ] ÷ [(1+r)ⁿ - 1]

M = payment, P = principal, r = monthly rate, n = number of payments

When Should You Refinance?
Good Time to Refinance
  • Rates dropped 0.5-1% or more
  • Credit score improved significantly
  • Plan to stay in home beyond break-even
  • Want to switch from ARM to fixed
  • Need to remove PMI
Think Twice If...
  • Planning to move soon
  • Break-even is more than 3-4 years
  • Close to paying off current loan
  • Home value has decreased
  • High closing costs relative to savings
Typical Closing Costs
Lender Fees (1-2%)
  • Origination fee
  • Application fee
  • Underwriting fee
  • Points (optional)
Third-Party Fees
  • Appraisal: $300-$600
  • Title search: $200-$400
  • Title insurance: 0.5-1%
  • Attorney fees: $500-$1,000
Government Fees
  • Recording fees
  • Transfer taxes (varies by state)

Total closing costs typically range from 2-5% of loan amount

Money-Saving Tips
Negotiate Fees

Many lender fees are negotiable. Ask for fee waivers or reductions, especially if you have good credit.

Shop Multiple Lenders

Get quotes from at least 3-5 lenders. Rates and fees can vary significantly.

Consider No-Closing-Cost Option

Trade a slightly higher rate for $0 closing costs. Good if you might move soon.

Understanding Refinance Break-Even

What Is Break-Even?

The point when your monthly savings equal the total closing costs paid.

  • Closing costs are upfront
  • Savings accumulate monthly
  • Break-even is when you've "earned back" costs
  • After break-even, you're in profit
Key Factors

Several factors affect whether refinancing makes sense.

  • Interest rate difference
  • Closing costs amount
  • How long you'll stay in the home
  • New vs. old loan term
Common Mistakes

Avoid these refinancing pitfalls.

  • Only comparing monthly payments
  • Ignoring total interest paid
  • Resetting to 30 years repeatedly
  • Not factoring in closing costs