Finance

Mortgage Refinance Break-Even Calculator

Compare an existing mortgage payment with a proposed refinance and find when closing costs are recovered. The calculator uses break-even months = total refinance costs ÷ monthly payment savings. It returns more than one result so you can check the main answer against a useful secondary measure. Break-even is the closing cost divided by monthly payment savings; total interest still depends on the new term. Taxes, insurance, penalties, points, and term extension can outweigh a lower headline payment.

Educational scenario only. Confirm rates, fees, taxes, contract terms, and eligibility with the relevant institution or adviser.

Last Updated: July 10, 2026

Calculate and compare

Use the number box for precision or the slider for fast scenario testing.

Refinance balance$Amount rolled into the new loan.Current rate%Existing annual rate.Proposed rate%New annual rate.New termyearsLength of proposed loan.Closing costs and penalties$Cash or financed transaction costs.

Scenario results

Current modeled payment

$2,349.1

Uses the entered balance and new-term length for a clean rate comparison.

Proposed payment

$2,138.96

Monthly difference: $210.14.

Simple break-even

40.4 months

Closing costs divided by monthly payment savings.

How the calculation works

Use consistent units and retain full precision until the final display step.

break-even months = total refinance costs ÷ monthly payment savings

Refinance balance340000 $

Current rate6.75 %

Proposed rate5.75 %

New term25 years

Closing costs and penalties8500 $

Worked example

Reproduce the displayed scenario, then change one assumption at a time.

Start with the displayed scenario

These values remain visible and editable, so the example can be reproduced.

Refinance balance: 340000 $; Current rate: 6.75 %

Apply the formula

Keep units consistent before substituting the inputs.

break-even months = total refinance costs ÷ monthly payment savings

Check Current modeled payment

Uses the entered balance and new-term length for a clean rate comparison.

$2,349.1

Assumptions behind the result

• Inputs use the units shown beside each control.
• The displayed formula is applied without hidden market or demographic data.
• Rounding occurs only for display; calculations keep full numeric precision.
• Break-even is the closing cost divided by monthly payment savings; total interest still depends on the new term.
• Taxes, insurance, penalties, points, and term extension can outweigh a lower headline payment.

Mistakes that change the answer

• Mixing percentages with decimals or mixing incompatible units.
• Relying on a rounded intermediate value instead of the full result.
• Changing several assumptions at once instead of testing refinance balance separately.

Questions about mortgage refinance break-even calculator

What does the mortgage refinance break-even calculator calculate?

Compare an existing mortgage payment with a proposed refinance and find when closing costs are recovered.

Can I verify the result by hand?

Yes. Use break-even months = total refinance costs ÷ monthly payment savings with the displayed inputs, then compare your answer with the first result card.

What is the main limitation?

Taxes, insurance, penalties, points, and term extension can outweigh a lower headline payment.

What to calculate next

Mortgage Extra Payment Payoff Calculator HELOC Draw and Repayment Calculator Down Payment and Closing Cash Calculator

Calculator methods and editorial structure reviewed July 11, 2026. Results are estimates; verify regulated rates, eligibility rules, and professional decisions with the cited primary source.