Include taxes/insurance?

No—P&I only. Add escrow separately to budget total payment.

Add points to closing costs; subtract lender credits to see net costs.

This focuses on rate/term; cash-out changes balance and may change rate/fees.

You can model an ARM by entering the current rate as a proxy; payments will differ in reality.

Not included—breakeven is simple months via payment savings.

finance calculator

Refinance Breakeven Calculator

Compare your current mortgage to a refinance mid-term to see payment change, interest difference, and breakeven months on closing costs.

Results

Current payment (P&I): $1,812
Interest remaining (current): $328,713
New payment (P&I): $1,634
Interest over new term: $308,241
Monthly payment change: $178
Breakeven months on closing costs: 25.33

Overview

Refinancing sounds simple—swap your current mortgage for a new one at a better rate—but the real question is whether the monthly payment savings are worth the closing costs and any reset of your payoff timeline. The breakeven point is where total savings from the lower payment finally catch up to the upfront cost of the refi.

This refinance breakeven calculator walks you through that tradeoff by comparing your current payment and interest to a proposed new loan mid-stream. You enter your remaining balance, current rate, original term and months already paid, then specify the new rate, new term, and closing costs. The tool then shows you the new payment, monthly savings, interest difference, and how many months it takes to recover the closing costs with those savings.

How to use this calculator

Gather your current loan details: remaining balance, current APR, original term (for example, 30 years), and how many months you’ve already paid.
Enter those current-loan inputs so the calculator can reconstruct your existing payment and remaining term.
Enter the new loan’s APR, term length, and your estimated closing costs (including lender fees, third-party costs, and any points).
Decide whether you want to treat closing costs as paid in cash or rolled into the new balance; if you’re rolling them in, add them to the balance before entering the new loan amount.
Review the current vs new monthly payment, monthly savings, estimated total interest, and the breakeven months on closing costs.
Experiment with different new terms (for example, 30 vs 20 vs 15 years) and rates to see how payment, breakeven, and lifetime interest change.

Inputs explained

Current balance: The remaining principal on your existing mortgage. You can find this on your most recent statement or by checking your online account.
Current rate: Your current loan’s annual percentage rate (APR). This is the interest rate you are paying today, not the original rate if it has changed.
Original term / months elapsed: The original length of your mortgage (for example, 360 months for a 30-year loan) and how many monthly payments you’ve already made. Together, these let us infer how many payments remain.
New rate/term: The APR and term for the refinance you’re considering—such as a new 30-year fixed at a lower rate, or a shorter 15-year term with a higher payment but faster payoff.
Closing costs: Total expected refinance costs (lender fees, appraisal, title, recording, and any points). These are the dollars you need to “earn back” via lower payments before the refi truly pays off.

How it works

We start by reconstructing your current loan: given the original term and months elapsed, we infer how many payments are left and compute the current principal-and-interest payment using your remaining balance and current APR.

Next, we model the refinance as a new fixed-rate loan using the new APR and term you enter. You can treat the new balance as either just your remaining principal or principal plus closing costs if you plan to roll fees into the loan.

The difference between your current payment and the new payment is your estimated monthly savings (which can be negative if the new payment is higher, such as when shortening the term).

Breakeven months are calculated as Closing costs ÷ Monthly savings. If savings are small, breakeven may be far in the future; if savings are negative or zero, breakeven is not meaningful.

We also estimate total interest remaining on your current loan vs total interest on the new loan over their full terms so you can see whether you are trading lower payments for higher lifetime interest or genuinely reducing interest cost.

All calculations focus on principal and interest only; taxes, insurance, and PMI are excluded so you can isolate the refi’s core loan math.

Formula

Current payment = P × r(1+r)^n / [(1+r)^n − 1]
New payment = P × r(1+r)^n / [(1+r)^n − 1]
Savings = Current payment − New payment
Breakeven = Closing costs ÷ Savings

When to use it

Checking if a refi lowers payment enough to justify costs within the timeframe you expect to keep the home.
Comparing rolling back to a new 30-year term with a much lower payment vs choosing a shorter term that preserves or accelerates payoff.
Estimating interest saved (or added) when resetting the clock partway through your original mortgage.
Testing how adding points to buy down the rate affects breakeven timing vs taking a slightly higher rate with lower upfront costs.
Evaluating whether a modest rate drop is worth it once you include hard closing costs and potential lender credits.

Tips & cautions

If you stretch back to a fresh 30-year term, the payment drop can be dramatic, but total interest may increase; always compare total interest remaining, not just the monthly payment.
Subtract lender credits or add discount points to your closing costs input to see your true net cost and a more accurate breakeven.
Use realistic closing costs for your market and loan size—ask lenders for loan estimates so you’re not underestimating fees.
If you expect to move or refinance again within a few years, prioritize breakeven occurring well before that horizon; a 7–10 year breakeven rarely makes sense if you’ll only stay for 3–5 years.
Run scenarios with and without rolling costs into the new loan to see how financing costs vs paying them in cash affects both payment and long-term interest.
Principal and interest only; does not include taxes, insurance, HOA dues, or PMI changes that may occur with a refinance.
Assumes fixed-rate amortization for both current and new loans; adjustable-rate features, interest-only periods, or balloon payments are not modeled.
Uses a simple breakeven based on payment savings and does not account for time value of money or alternative uses of cash used to pay closing costs.
Does not model cash-out refinances, where increasing the balance and potentially the rate can change the economics beyond simple payment savings.
Refinance eligibility depends on credit, income, property value, and lender overlays; this tool focuses solely on math, not approval odds.

Worked examples

$280k balance, 6.5%, 30-year orig, 24 months in → new 5.75%/30yr, $4,500 costs

Current P&I ≈ $1,772
New P&I ≈ $1,635
Savings ≈ $137/mo
Breakeven ≈ 32.8 months

$320k balance, 7%, 30-year orig, 60 months in → new 5.8%/25yr, $5,000 costs

Current P&I ≈ $2,129
New P&I ≈ $2,057
Savings ≈ $72/mo
Breakeven ≈ 69.4 months

Deep dive

This refinance breakeven calculator compares your current mortgage to a proposed new rate and term mid-stream so you can see payment change, monthly savings, total interest difference, and how many months it takes to recover closing costs.

Use it to decide whether refinancing now is worth the fees or if sticking with your existing loan makes more sense given how long you expect to keep the mortgage and the size of the rate drop.

By modeling your current loan where it actually stands today—rather than at day one—this tool helps you avoid the common trap of focusing only on a lower payment while quietly adding years and interest to your payoff timeline.

FAQs

Include taxes/insurance?: No—P&I only. Add escrow separately to budget total payment.
Points and credits?: Add points to closing costs; subtract lender credits to see net costs.
Cash-out refi?: This focuses on rate/term; cash-out changes balance and may change rate/fees.
ARM to fixed?: You can model an ARM by entering the current rate as a proxy; payments will differ in reality.
Time value of money?: Not included—breakeven is simple months via payment savings.

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Estimate only. Actual refi terms, fees, and taxes/insurance vary. Confirm with your lender for precise numbers.