Refinance Break-Even Calculator
Is refinancing worth it? This tells you the exact month when your new loan's savings exceed the closing costs — the only number that actually matters.
Your Loan
The Only Refinance Math That Matters
Break-even is the single most important number in a refinance decision. It's the point where your cumulative monthly savings equal what you paid in closing costs. If you plan to sell or refinance again before that point, you lose money. If you stay past it, every subsequent month is pure savings.
What Most Calculators Miss
Cheap online refinance calculators divide closing costs by monthly savings and call it done. That ignores something critical: you're also extending your loan term. If you have 26 years left on your current mortgage and refinance into a fresh 30-year, you've added 4 years of payments. That can erase much of the interest savings even if the rate is lower.
This calculator accounts for that by computing total lifetime interest under both scenarios, not just the monthly difference.
When a "Bad" Rate Makes Sense Anyway
Sometimes refinancing to a higher rate is the right call — yes, really. If you have a 20-year-old 3% mortgage but need to fund a kitchen renovation, cash-out refinancing at 6% beats using a 7-9% home equity loan. The math depends on what the cash is for.
Lender Comparison Spreadsheet
Compare up to 5 lenders side-by-side with all fees itemized.
Frequently Asked Questions
How much lower does the rate need to be to refinance?
Old rule was 1-2% lower. Real answer depends on your break-even point. A 0.5% drop might be worth it on a $500,000 loan with low closing costs. A 2% drop might not be worth it if closing costs are high and you'll move in 18 months.
What are typical refinance closing costs?
2-5% of loan amount. On a $300,000 mortgage, expect $6,000-$15,000. Major components: loan origination (0.5-1%), appraisal ($500-$800), title insurance ($1,000-$2,500), and various fees. Get Loan Estimates from 3+ lenders to compare.
Can I roll closing costs into the loan?
Yes — this is called a "no-cost refinance." You pay nothing upfront but accept a slightly higher rate or larger loan balance. Math-wise it almost always costs more than paying closing costs in cash, but it preserves your liquidity.
Does refinancing hurt your credit score?
Temporarily, yes. The hard inquiry drops your score 5-10 points for a few months. If you apply to multiple lenders within 14-45 days, credit bureaus count them as one inquiry. Impact is usually gone within 6-12 months.