Refinance Break-Even Calculator

Enter your current loan details and potential new terms to see how long it takes to recoup closing costs. Compare 30-year, 20-year, and 15-year refinance scenarios side by side.

Refinance FAQs

What is the refinance break-even point?

The break-even point is how many months it takes for your monthly payment savings to offset the closing costs of the refinance. If closing costs are $6,000 and you save $200/month, your break-even is 30 months. If you plan to stay in the home beyond that, refinancing makes financial sense.

When does refinancing make sense?

Refinancing typically makes sense when you can reduce your interest rate by at least 0.5%, plan to stay in the home long enough to recoup closing costs, want to shorten your loan term to pay off the mortgage sooner, or need to access equity through a cash-out refinance. Use our calculator to find your personal break-even point.

How much do refinance closing costs typically run?

Refinance closing costs generally range from 2% to 5% of the loan amount. On a $300,000 loan that's $6,000 to $15,000. Some lenders offer no-closing-cost refinances where costs are rolled into the rate — the calculator lets you model both approaches so you can see which saves more over your time horizon.

Should I extend my loan term when I refinance?

Extending your term lowers the monthly payment but restarts the amortization clock and increases total interest paid. Refinancing into a shorter term (say, from 30 to 15 years) costs more per month but saves substantially on lifetime interest. The side-by-side scenarios in this calculator show all three common options — 30, 20, and 15 years — so you can compare directly.

What is a cash-out refinance?

A cash-out refinance replaces your existing mortgage with a larger loan, giving you the difference in cash. Homeowners use the funds for renovations, debt consolidation, or other financial goals. Because the new loan balance is higher, the monthly payment and total interest also increase — the calculator includes a cash-out field so you can model the impact.