Refinance Break-Even Calculator
Closing costs in, monthly savings out, and the exact month the refinance starts earning. Check the five-year net before you sign.
| Current payment (P&I) | — |
| New payment (P&I) | — |
| Monthly savings | — |
| Break-even | — |
| Net after 2 years | — |
| Net after 5 years | — |
| Net after 10 years | — |
New payment is the fully-amortizing payment on the balance over the new term. No taxes/insurance change (they don't move), no rate-buy comparison, no tax-deduction effects.
How the math works
Payments: standard annuity on the balance at each rate. Current: rate over remaining term. New: new rate over new term.
Break-even = closing costs ÷ monthly savings. Simple, and honest, because the escrow portion of your payment does not change.
Net after N years = savings × 12N − costs. If the number is negative the year you plan to sell, the refinance is a loss.
Watch the clock reset: term 25 → 30 lowers the payment and lengthens your interest. The tool reports it; the 10-year net is the number that exposes a clock reset.
Frequently asked questions
What is the average payback period for refinancing a mortgage?
Typical closing costs are 2-5% of the loan. On a $300,000 refi costing $6,000, saving $150 a month pays back in 40 months. Most refinances break even in 24 to 48 months; beyond 60 months the math gets thin.
Is a no-closing-cost refinance free?
No. The lender rolls the costs into a higher rate or a larger balance, which is a loan you repay with interest. Compare the true-cost refinance (cash upfront, lower rate) side by side; the no-cost version usually loses if you stay past five years.
When does refinancing make you worse off?
When you reset the clock. Refinancing a 16-year-old 30-year loan back to 30 years drops the payment but can double lifetime interest. If the break-even is longer than you plan to stay in the house, the deal is negative.