Reckonary / Finance / Refinance

Refinance calculator

Refinance break-evenmonths to recoup

Break-even point

2 yr 6 mo
Monthly savings$150
Net savings over 5 years$4,500

Refinancing your mortgage almost always costs money up front, but it can lower your monthly payment for years to come. The question that actually matters is simple: how long until the monthly savings pay back what the refinance costs? That moment is your break-even point, and this calculator finds it.

How this calculator works

Enter your current monthly payment, the new payment you have been quoted, and the total closing costs. The difference between the two payments is your monthly savings. Divide your closing costs by that number and round up, and you have the break-even month — the point where the refinance has paid for itself. From then on, the lower payment is a genuine gain.

An example

Say you pay $1,500 a month now and a refinance drops it to $1,350. That is $150 saved every month. If closing costs are $4,500, you recover them in 30 months — two and a half years. Over five years you save $9,000 in payments against $4,500 in costs, for a net of $4,500 ahead.

Good to know

  • Compare the break-even month to how long you plan to stay in the home. Selling before break-even usually means the refinance was not worth it.
  • Include every up-front fee in closing costs, including any points, so the break-even is honest.
  • A lower payment from a longer term can still cost more in total interest. This tool measures cash flow, not lifetime interest.

Frequently asked questions

What is the break-even point on a refinance?

It's the number of months it takes for your monthly savings to add up to what you paid in closing costs. After that point, the lower payment is money in your pocket.

What counts as closing costs?

Lender fees, appraisal, title and escrow charges, and any points you pay to lower the rate. Add them all into the closing costs field so the break-even reflects the true up-front cost.

What if my new payment is higher?

Then there are no monthly savings, so the calculator shows no break-even. Refinancing to a higher payment only makes sense for other reasons, like a shorter term or pulling out cash.

Should I refinance if I plan to move soon?

Compare your break-even month to how long you expect to stay. If you'll sell before you break even, the closing costs likely outweigh the monthly savings.

Last reviewed June 2026. This tool is for education, not financial advice.