Refinance Calculator - Break-Even & Savings

How to use this tool

1. Enter your current loan details. Input your remaining balance, current interest rate, and how many months are left on your loan.
2. Enter new loan terms. Enter the quoted new rate and term, any cash-out amount, closing costs, lender credit, and whether remaining costs are paid upfront or rolled into the loan.
3. Set your hold period. Enter how many months you plan to keep this loan before selling or refinancing again.
4. Review results. See your monthly savings, break-even month, net savings over your hold period, and a personalized recommendation.

How to use the refinance calculator

Enter your remaining loan balance, current interest rate, and remaining term. Then enter the proposed new rate, new term, and all closing costs, including flat fees, a percentage of the balance, and any discount points. Finally, enter how many months you plan to keep the loan. The calculator shows your monthly savings, break-even month, and net savings over your hold period instantly.

What is the break-even point?

The break-even point is the number of months it takes for your cumulative monthly savings to cover the cash you pay at closing after any lender credit. It is a cash-flow estimate: it does not compare the loans’ remaining balances, home equity, taxes, insurance, or mortgage insurance, so use the interest comparison and your full loan estimates as well.

Cash break-even months = ceil(Cash due at closing ÷ Monthly payment savings)

For example, if $6,000 of costs are due upfront and you save $150 per month, the calculator rounds up to 40 months. If costs are rolled into the new balance, cash break-even is immediate because no closing cash is entered in that calculation; the financed costs still increase the balance and the interest you may pay.

Refinancing to a longer vs. shorter term

Refinancing to a longer term (e.g., resetting to 30 years) lowers the monthly payment but extends the time you pay interest, often increasing lifetime interest paid significantly. Refinancing to a shorter term increases the monthly payment but reduces total interest and builds equity faster. This calculator surfaces both monthly savings and lifetime interest comparison. Use the Match remaining term control to compare a new rate over the months left on your current loan instead of automatically resetting to a longer term.

When closing costs eat up the savings

If you plan to sell or refinance again before the break-even point, the upfront closing costs will exceed your savings, making the refinance a net loss. As a rule of thumb, refinancing only makes strong cash-flow sense when you will keep the loan for at least 1.5× this calculator’s cash break-even period. This rule does not account for the difference in loan balances when you sell or refinance.

Cash-out refinancing

A cash-out refinance replaces your mortgage with a larger loan and gives you the difference as cash. Enter the amount you plan to take out; it is added to the proposed loan balance and affects the estimated payment and full-term interest. This calculator does not estimate your home value, loan-to-value ratio, eligibility, or a cash-out-specific rate, so enter the rate from a lender quote and compare the full terms before deciding.

No-closing-cost refinance

The calculator lets you apply a lender credit to entered costs and either pay the remainder upfront or roll it into the new loan balance. A lender may offer credits in exchange for a higher rate; this tool does not derive that trade-off, so enter the quoted rate yourself. When costs are rolled in, cash due is zero for the break-even calculation, but the larger balance adds interest. The cash-flow result does not show the loan balance you will owe when you sell or refinance, so it is not a complete equity or total-cost comparison.