Refinance Breakeven Calculator
Find out how many months until refinancing pays for itself.
Cumulative Savings Over Time
When Does Refinancing Make Sense?
Refinancing replaces your existing mortgage with a new one — ideally at a lower interest rate. But refinancing is not free. You will pay closing costs (typically 2-5% of the loan balance), so the key question is: how long will it take for the monthly savings to recoup those upfront costs? That is your breakeven point.
A breakeven period under 24 months is generally considered strong — you recover costs quickly and enjoy years of savings. Between 24 and 48 months is moderate and can still make sense if you plan to stay in the home long-term. Beyond 48 months, you should carefully consider whether you will remain in the home long enough to benefit.
Beyond the breakeven calculation, consider the total cost of refinancing. Extending your loan term (for example, going from 20 years remaining to a new 30-year mortgage) may lower your monthly payment but increase total interest paid significantly. This calculator keeps the same remaining term to give you an apples-to-apples comparison.
Other factors include your credit score (which affects the rate you qualify for), whether you are switching from an adjustable-rate to fixed-rate mortgage, and whether you want to tap equity through a cash-out refinance. Always get loan estimates from multiple lenders and compare the total cost of the loan, not just the monthly payment.