Adjust your numbers
Your refinance scenario
Type exact values. Your result updates instantly—no application or credit pull.
Current loan
What you have today
Principal-and-interest payment is estimated automatically. If you enter the statement amount, exclude taxes, insurance, HOA dues, and mortgage insurance.
New loan to compare
The offer or rate you want to test
Your comparison
Updates instantlyEstimated new principal & interest
$1,896/mo
$300,000 at 6.500% for 30 years
Monthly change
+$321
lower monthly payment
Break-even
1 yr 1 mo
to recover costs
Payment comparison
See lifetime cost details
Personalized target ready
Get a live refinance quote
Use this lower-rate target to request current pricing and a reviewed refinance option based on your numbers.
Target below your current rate
7.375% or lower
Quotes arranged by Better Offers Inc, a licensed mortgage brokerage — 15 years in lending · Equal Housing Opportunity.
Calculator results are estimates for planning, not a loan approval, commitment, rate lock, or Loan Estimate.
What the refinance break-even calculator calculates
This tool compares your current mortgage against a hypothetical new one, and answers the question that actually decides whether refinancing is worth it: how long until the monthly savings pay back the closing costs — the break-even point.
It estimates your monthly savings (current payment minus new payment), the total closing costs for the new loan, the break-even point in months, and the estimated lifetime savings if you keep the new loan for its full remaining term.
A lower monthly payment doesn't automatically mean refinancing makes sense — if you move or refinance again before the break-even point, you can end up worse off despite the lower payment along the way.
How to use it, step by step
- 1Enter your current loan balance, current interest rate, and current monthly payment (or let the calculator estimate it from the balance, rate, and remaining term).
- 2Enter your remaining term — how many years are left on your current loan, not the original term.
- 3Enter the new interest rate and new loan term you want to test, along with estimated closing costs for the new loan.
- 4Review the monthly savings, the break-even point in months, and the estimated lifetime savings over the new loan's term.
- 5Compare the break-even period against how long you actually expect to keep the loan — if you'll move or refinance again sooner, the math may not favor refinancing.
A worked example
Example inputs
- Current loan balance
- $320,000
- Current payment
- $2,300/month
- Closing costs
- $6,000
- New interest rate (example only)
- 6.25%
Result
At the illustrative new rate, the new monthly payment on the same balance comes in lower than the current $2,300, producing monthly savings of roughly $300 in this example.
Dividing the $6,000 in closing costs by $300 in monthly savings gives a break-even point of about 20 months. If the borrower expects to stay in the home well beyond 20 months, the refinance likely pays for itself; if they expect to move sooner, it may not.
The 6.25% rate above is an illustrative example input only, not a current quote.
How to read the result
The break-even point in months is the single most useful number here — compare it honestly against how long you actually expect to keep the loan or stay in the home.
Lifetime savings looks appealing but assumes you keep the new loan for its entire remaining term without moving or refinancing again — a reasonable but not guaranteed assumption.
A refinance that lowers your payment but extends your term can increase total interest paid over the life of the loan even while saving money monthly — check both numbers, not just the monthly one.
Common mistakes
- Refinancing for a marginally lower rate without accounting for closing costs, which can erase the savings if you don't stay in the loan long enough to break even.
- Resetting the clock on a 30-year term after several years into the current loan, which can increase total lifetime interest even with a lower rate and lower payment.
- Ignoring the break-even point when a move, sale, or another refinance is already likely within that window.
- Comparing only the new rate to the current rate without looking at fees, points, and closing costs, which materially change whether the math works.
Related guides
- Cash-Out Refinance Calculator
- Fixed vs. Adjustable Rate
- Extra Payment Calculator
- Glossary: Rate-and-Term Refinance
Frequently asked questions
It's the point — usually measured in months — where your cumulative monthly savings from a lower payment equal the closing costs you paid for the new loan. Before that point, you're still recovering the upfront cost; after it, you're net ahead.
It depends on the break-even timeline and how long you plan to keep the loan. A small monthly savings with low closing costs can still make sense if you'll be in the loan for years; a small savings with high closing costs may take too long to pay back.
By default, a new refinance typically starts a new term — for example, a fresh 30 years. Many lenders also offer shorter terms that match your remaining time, so ask about term options that don't extend your payoff date if that matters to you.
Refinance closing costs commonly run around 2% to 5% of the loan amount, covering items like origination, appraisal, title, and recording fees — similar in kind to purchase closing costs, though the specific line items can differ.
There's generally no hard limit on how many times you can refinance, though most loans have a seasoning requirement (a minimum time since your last loan) and each refinance brings its own closing costs, so it only makes sense when the math supports it.