Refinance Break-Even Calculator

Calculate refinance break-even from closing costs and monthly savings.
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Break-Even

25 months

Annual Savings

$2,400.00

Net Savings Projection

After 1 year-$2,600.00
After 2 years-$200.00
After 3 years$2,200.00
After 5 years$7,000.00
After 10 years$19,000.00

Use the Refinance Break-Even Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.

Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.

How It Works

Our Refinance Break-Even Calculator helps you determine how long it will take to recoup the closing costs associated with refinancing your mortgage, based on your monthly savings. Understanding your break-even point is crucial for making informed financial decisions, especially in 2026 where fluctuating interest rates and property values can significantly impact your long-term mortgage strategy. This calculator empowers you to see if the immediate costs of refinancing are justified by the future savings.

The break-even point is calculated by dividing your total closing costs by your monthly savings from the refinance. Total closing costs include all fees associated with the new loan, such as appraisal fees, title insurance, and loan origination fees. Monthly savings are determined by the difference between your current monthly mortgage payment and your new, lower monthly mortgage payment after refinancing.

When using this calculator, remember that it doesn't account for potential interest rate changes over time, which could further impact your savings. Also, be mindful of the opportunity cost of the money spent on closing costs; that capital could potentially be invested elsewhere. A common mistake is to only consider the interest rate reduction without factoring in the full extent of closing costs, leading to an inaccurate assessment of the break-even period.

Example: Refinancing a $300,000 Mortgage in 2026

  1. 1 Let's say you're refinancing a $300,000 mortgage in March 2026. Your current monthly payment is $1,800. After refinancing, your new monthly payment will be $1,500, resulting in a monthly savings of $300. Your total closing costs for this refinance are $6,000.
  2. 2 To calculate the break-even point, we divide the total closing costs by the monthly savings: $6,000 (Closing Costs) / $300 (Monthly Savings) = 20 months.
  3. 3 In this scenario, your refinance break-even point is 20 months.
  4. 4 This means it will take 20 months of monthly savings to recoup the initial $6,000 spent on closing costs. If you plan to stay in your home for longer than 20 months, this refinance could be a financially sound decision, assuming all other factors remain constant.

Source: CFPB — Owning a Home · Last updated: April 2026

Frequently Asked Questions

How do I calculate the break-even on a refinance?
Divide your total closing costs by your monthly payment savings. If refinancing costs $6,000 and saves $200/month, break-even is 30 months (2.5 years). If you plan to stay in the home at least that long, refinancing makes financial sense.
When is it worth it to refinance?
The old rule of thumb was a 1% rate drop, but the real answer depends on break-even timing. If the break-even is under 3 years and you plan to stay longer, it is likely worth it. Also consider the loan term reset; refinancing into a new 30-year loan extends your total repayment timeline.
What closing costs should I include in the break-even calculation?
Include all refinance costs: origination fee, appraisal, title insurance, recording fees, and any points. Do not count costs you would pay anyway (like homeowners insurance). Subtract any lender credits. Total refinance closing costs typically run 2-5% of the loan amount.

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