Refinance Break-Even Calculator
Find the exact month a refinance stops costing you money and starts saving it — measured on total cost, including the balance you still owe.
Private by design. Your numbers stay on this device.
Educational estimates only. Not financial, tax, or lending advice.
What is a refinance break-even point?
The break-even point is the month when the money a refinance has saved you finally exceeds what it cost you to get it. Before that month you are behind; after it you are ahead. If it falls after the date you expect to sell or refinance again, the refinance costs you money — even if the monthly payment went down.
The quick version divides closing costs by the monthly payment reduction: $6,000 ÷ $200 = 30 months. This calculator uses a stricter method that also counts the balance you still owe, because a longer term lowers the payment partly by building equity more slowly — and that is deferred debt, not savings.
Built for US mortgages. Every rate, cost and tax figure below is an editable example you enter — never a live quote.
Refinance decision
- Today
- $2,767/mo
- Rate & term refi
- $2,623/mo
- Break-even
- Month 29
- Staying
- 7 years
Your decision dashboard
Each card shows which scenario leads on one measure over your 7 years planned stay — and what you give up to get it. There is no single best option, because these measures pull against each other.
Lowest monthly payment
Rate-and-term refinance
$2,623/mo all-in
Trade-off: A lower payment usually means a longer term or a bigger balance, which can raise what you pay in total.
Lowest cost over your planned stay
Rate-and-term refinance
$449,929
Trade-off: This counts payments made plus the balance still owed at the end of your stay, minus any cash you received. It can still carry a higher monthly payment.
Fastest payoff
Rate-and-term refinance
25 years
Trade-off: Paying off soonest normally requires the highest monthly outlay and ties up cash you cannot easily get back.
Lowest closing cash needed
Keep current mortgage
$0
Trade-off: Paying little or nothing upfront often means costs are financed into the balance, where they accrue interest.
Scenario by scenario
Keep current mortgage
Change nothing. No closing costs, no new loan, and your existing rate and payoff date stay exactly as they are.
- All-in monthly
- $2,767
- Cost over your stay
- $465,286
- vs keeping your loan
- Baseline
- Break-even
- —
Rate-and-term refinance
Replace your mortgage with a new 25-year loan at 5.75%.
- All-in monthly
- $2,623
- Cost over your stay
- $449,929
- vs keeping your loan
- +$15,357
- Break-even
- Month 29
Full comparison
Every measure, side by side, over the 7 years you expect to stay. Scroll the table sideways on a narrow screen.
| Measure | Keep current | Rate & term refi |
|---|---|---|
| Interest rateThe rate on the new or largest loan in this scenario. | 6.875% | 5.75% |
| Starting loan balance | $320,000Low | $327,500 |
| Starting LTV (loan-to-value) | 71.1% | 72.8% |
| Principal & interest | $2,204 | $2,060Low |
| Extra principalVoluntary principal on top of the scheduled payment. Part of what you pay each month, so it belongs in the all-in figure. | — | — |
| PMI | — | — |
| Property tax + insuranceIdentical across every scenario for the same home, but a real part of the monthly bill. | $563 | $563 |
| Monthly HOA dues | — | — |
| All-in monthly payment | $2,767 | $2,623Low |
| Total closing costs | NoneLow | $7,500 |
| Cash needed at closingClosing costs paid in cash, plus any lump sum you contribute. | $0Low | $0Low |
| Cash received | None | None |
| Interest over 7 years | $145,286 | $122,429Low |
| Balance left after 7 yearsWhat you would still owe when you expect to sell or refinance again. | $280,138 | $276,862Low |
| Equity after 7 yearsHome value less the balance owed. Uses your assumed appreciation rate, which is 0% unless you change it — it is never used to remove mortgage insurance early. | $169,862 | $173,138Low |
| Invested balance after 7 yearsOnly the growth on this account is credited against net cost. The contributions are money you paid in, so counting the whole balance would count them twice. | — | — |
| Net cost over your planned stayCash closing costs + payments made + balance still owed − cash received. Excludes property tax, insurance and HOA, which are identical across scenarios. | $465,286 | $449,929Low |
| Savings vs keeping your mortgageThis is not the same as interest saved: it also counts the balance you still owe at the end of your stay and any cash you paid upfront. The row above reconciles the two. | Baseline | +$15,357Low |
| Why that differs from interest saved | — | $22,857 less interest, less $7,500 of extra balance you start out owing — leaving you $15,357 better off. |
| Break-even point“Ahead from month 1” means there was no upfront cost to recover. “Never recovers” means the costs are never paid back. | — | Month 29 |
| Simple paybackUpfront cash divided by the monthly payment saving. This is the number most people mean by break-even, and it flatters a refinance: it ignores the principal you stop paying down when the term restarts. The equity-adjusted figure above is the one to rank on. | — | No upfront cash to recover |
| Time to payoff | 26 years | 25 yearsLow |
| Total interest, full term | $367,691 | $290,598Low |
| Lifetime cost (interest + costs) | $367,691 | $298,098Low |
How to read this: “Low” marks the lowest figure among the scenarios shown — it is not a recommendation. Net cost counts payments made plus the balance still owed at the end of your stay, minus cash received, which is what makes loans of different sizes and terms comparable.
Charts
Mortgage balance over time
What you still owe each month under every selected scenario, including any second lien. The dashed line marks the end of your planned stay.
Cumulative interest paid
Total interest paid to date. A line that flattens has reached payoff. Where lines cross is where one scenario overtakes another on interest.
Break-even: cumulative savings against keeping your mortgage
Above the zero line a scenario has saved you money overall; below it, it has cost you. Each marker is that scenario's break-even month — where its line crosses zero.
Rate & term refi: breaks even in month 29 (2 years 5 months).
What your first monthly payment is made of
Principal and interest is only part of the bill. Property taxes, insurance, mortgage insurance and HOA dues are stacked here at their month-one amounts.
What each scenario actually means
Keep current mortgage
- This is the baseline every other scenario is measured against.
Rate-and-term refinance
- A rate-and-term refinance replaces your entire existing mortgage balance with a new loan. No cash is taken out.
- Closing costs are financed, so you pay interest on them for the life of the loan and your balance starts higher than it is today.
Want the terminology behind these figures? The mortgage glossary defines every term used here, including break-even point, LTV and mortgage recast.
Full amortization schedule
Every payment, month by month: how much goes to interest, how much retires principal, and what you still owe afterwards. Switch to the annual view for a year-by-year summary, or download the full schedule as a CSV that opens in Excel, Google Sheets and Numbers.
| Month | Payment date | Beginning balance | Payment | Principal | Interest | Extra principal | Ending balance | Cumulative interest | Mortgage insurance | LTV |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Jan 01, 2026 | $320,000.00 | $2,204.15 | $370.82 | $1,833.33 | — | $319,629.18 | $1,833.33 | — | 79.9% |
| 2 | Feb 01, 2026 | $319,629.18 | $2,204.15 | $372.94 | $1,831.21 | — | $319,256.24 | $3,664.54 | — | 79.8% |
| 3 | Mar 01, 2026 | $319,256.24 | $2,204.15 | $375.08 | $1,829.07 | — | $318,881.16 | $5,493.61 | — | 79.7% |
| 4 | Apr 01, 2026 | $318,881.16 | $2,204.15 | $377.23 | $1,826.92 | — | $318,503.93 | $7,320.53 | — | 79.6% |
| 5 | May 01, 2026 | $318,503.93 | $2,204.15 | $379.39 | $1,824.76 | — | $318,124.54 | $9,145.29 | — | 79.5% |
| 6 | Jun 01, 2026 | $318,124.54 | $2,204.15 | $381.56 | $1,822.59 | — | $317,742.98 | $10,967.88 | — | 79.4% |
| 7 | Jul 01, 2026 | $317,742.98 | $2,204.15 | $383.75 | $1,820.40 | — | $317,359.23 | $12,788.28 | — | 79.3% |
| 8 | Aug 01, 2026 | $317,359.23 | $2,204.15 | $385.95 | $1,818.20 | — | $316,973.28 | $14,606.48 | — | 79.2% |
| 9 | Sep 01, 2026 | $316,973.28 | $2,204.15 | $388.16 | $1,815.99 | — | $316,585.12 | $16,422.47 | — | 79.2% |
| 10 | Oct 01, 2026 | $316,585.12 | $2,204.15 | $390.38 | $1,813.77 | — | $316,194.74 | $18,236.24 | — | 79.0% |
| 11 | Nov 01, 2026 | $316,194.74 | $2,204.15 | $392.62 | $1,811.53 | — | $315,802.12 | $20,047.77 | — | 79.0% |
| 12 | Dec 01, 2026 | $315,802.12 | $2,204.15 | $394.87 | $1,809.28 | — | $315,407.25 | $21,857.05 | — | 78.8% |
Showing 1–12 of 312 payments
Download any scenario
Each file is generated in your browser — nothing is uploaded. Scenarios with a second lien include a separate block for each loan.
Educational estimates only. Not financial, tax, or lending advice. Every rate here is an example you enter, never a live quote or an offer. Verify loan terms, closing costs, property taxes, insurance and mortgage insurance with qualified providers before deciding.
The break-even formula, in plain language
Two methods, one of which is honest about equity.
The simple method. Divide what you paid upfront by what you save each month:
Break-even months = closing costs ÷ monthly payment reduction
Fast, and fine when the new term matches your remaining term. It breaks down as soon as the terms differ — which is most of the time.
The total-cost method used here. For each month, this tool tracks:
cost(month) = closing costs paid in cash
+ all payments made so far
+ mortgage insurance paid so far
+ balance still owed
− cash received at closing
The break-even month is the first month where that running total for the refinance drops below the same running total for keeping your current mortgage. Including the remaining balance charges each option for the debt it leaves behind, which is what makes a 15-year and a 30-year loan comparable at all.
Why the two methods disagree
A worked example where the simple method says yes and the honest one says wait.
| 30-year refinance | 20-year refinance | |
|---|---|---|
| Monthly P&I | $1,911 | $2,297 |
| Monthly saving vs current | $496 | $110 |
| Simple break-even | 16 months | 69 months |
| Equity built in 5 years | Less | More |
| Total-cost break-even | Later than 16 months | Closer to the simple figure |
Illustrative figures rounded for clarity — run your own numbers above. The pattern is the point: the longer the new term, the more the simple method flatters the refinance.
The 30-year option looks dramatically better on the simple method because its payment falls furthest. But a chunk of that reduction comes from repaying principal more slowly over eight extra years. Once the remaining balance is counted, the gap narrows considerably. Both can still be good decisions — you just want to make them knowing which one you are choosing.
When there is no break-even point
A real and common outcome that most calculators hide.
Sometimes the cumulative savings line never crosses zero within your planned stay, or within the schedule at all. That happens when closing costs are large relative to the rate improvement, when the new term stretches far past your remaining term, or when the rate improvement is too small to overcome either.
This tool states that outcome plainly instead of reporting a break-even month decades away that you will never reach. It is not an error — it is the answer.
A cash-out refinance is harder to break even on than people expect. The cash you receive is offset by the larger balance you now owe, so it starts behind by roughly its closing costs just like any refinance — and then it also has to carry the interest on the money you took out. Frequently the line never crosses zero at all, and the tool says so.
The opposite case is worth naming too. Extra principal payments carry no closing costs, so they are ahead from the very first month and never need a break-even point. The results label that “Ahead from month 1” rather than “none”, because those are opposite outcomes that must not read the same.
Break-even questions
- How is the break-even point calculated here?
- Month by month, this tool tracks the total cost of each scenario — closing costs paid in cash, every payment made, mortgage insurance, plus the balance still owed at that month, minus any cash received. The break-even month is the first month where that running total for the refinance drops below the same running total for keeping your current mortgage.
- Why is that different from dividing closing costs by monthly savings?
- The simple division ignores what happens to your balance. A refinance into a fresh 30-year term lowers the payment partly by paying down principal more slowly, so some of the 'saving' is really deferred debt. Counting the remaining balance charges each scenario for the debt it leaves behind, which is why this method often produces a later break-even than the simple version.
- What if there is no break-even point within my planned stay?
- Then the refinance has not paid for itself by the time you expect to leave, and the tool says so plainly rather than showing a break-even month far beyond your horizon. That is a genuine result, not an error — it usually means the closing costs are too high relative to the rate improvement, or the new term stretches too far.
- Does a cash-out refinance have a break-even point?
- It can, but it is much harder to reach. The cash you receive is offset by the larger balance you now owe, so a cash-out starts behind by roughly its closing costs, exactly like any other refinance, and then it also has to carry the interest on the money you took out. Unless the rate improvement on your original balance is large enough to cover that too, the savings line never crosses zero, and this tool reports that plainly rather than inventing a break-even month.
Related calculators
- Refinance & recastThe full eight-scenario comparison: keep, refinance, cash out, HELOC, equity loan, recast, extra principal, or invest the difference.
- AffordabilityWork out a home price from income, debts, cash on hand and your own housing-to-income and debt-to-income ceilings.
- Home equityCompare four ways to turn home equity into cash, side by side.
- Mortgage recastSee what a lump sum plus a re-amortization does to your required payment.
- Extra paymentsModel monthly, annual and one-time extra principal against your payoff date.
- Amortization scheduleBuild a full month-by-month table and download it as CSV.