Mortgage Refinance Break-Even Calculator
Calculate break-even time for mortgage refinancing. Understand total costs, monthly savings, interest savings, and when refinancing makes sense based on your timeline.
Current Mortgage
New Mortgage Terms
Amount to take out for home improvements, debt payoff, etc.
Refinancing Costs
Appraisal, title, attorney, recording fees. Typically 2-5% of loan.
Each point costs 1% of loan and reduces rate ~0.25%. Break-even: ~5-7 years.
Lender fee for processing loan. Typically 0.5-1% of loan amount.
Rate & Term Comparison
Rate Difference:2.00% lower
Term Difference:5 years longer
Refinancing Costs Breakdown
Closing Costs:$5000.00
Points Cost:$0.00
Origination Fee:$3000.00
Total Cost:$8000.00
Monthly Payment Comparison
Current Payment:$2216.97
New Payment:$1703.37
Monthly Savings:$513.61
Break-Even Analysis
Break-Even:15 months (1.3 years)
Remaining Term:25 years
Refinance recommended. Break-even in 15 months.
Interest Analysis
Current Total Interest:$365092.06
New Total Interest:$313212.12
Interest Over Current Term:$211010.10
Net Savings (Current Term):$146081.96
Extending term increases total interest. Compare over remaining term for accurate savings.
When to Refinance
- Break-Even Rule: Refinance if break-even period is shorter than your expected time in home.
- Rate Drop: Generally worth refinancing if rate drops 1%+ and you plan to stay 3+ years.
- Points Decision: Pay points if staying 7+ years. Avoid points if moving sooner.
- Term Extension: Extending term lowers monthly payment but increases total interest. Consider if cash flow is priority.
- Cash-Out: Cash-out refi has higher rates. Consider HELOC or home equity loan for smaller amounts.
- Closing Cost Negotiation: Ask lender about no-closing-cost refi (higher rate, no upfront costs).
- Credit Score Impact: Better credit scores get better rates. Improve credit before refinancing if possible.
- Timing: Rates fluctuate. Lock rate when favorable. Don't wait too long chasing lowest rate.