Refinance Break-Even Calculator and Savings

This Refinance Break-Even Calculator estimates how many months it takes for a lower rate to recover closing costs. Enter the remaining balance, your current APR, and the months left on the loan, then test a new APR and term. The tool computes the new monthly payment, the monthly savings versus your existing payment, and the break-even month where cumulative savings exceed the costs you paid at closing. You can model costs paid in cash or rolled into the new loan, which slightly reduces savings because you also finance the costs.

To keep results realistic, use the exact months remaining from your statement and your true current APR. For the refinance, pick a new term you could qualify for—common choices are 30, 25, 20, or 15 years. If you plan to move or sell soon, set a time horizon; we’ll compare total costs only over those months rather than the full term. The advanced discount rate field estimates the present value of savings, which helps when rates are volatile or cash today is more valuable for your situation.

• Payment-based break-even: costs ÷ monthly savings (rounded up) if savings are positive.
• Interest view: we also show total interest remaining vs. the refinance scenario.
• Rolled costs: when costs are financed, the new loan amount rises and break-even usually takes longer.

Reading the output: the headline card shows the break-even months and the payment change. A summary block lists original payment, new payment, total interest for “keep loan” versus “refinance,” and the difference over your chosen horizon. A snapshot highlights Month 1, Month 6, Month 12, the midpoint, and the final month so you can sanity-check progress without scrolling a long table. Export the full comparison as CSV to analyze cash flows in a spreadsheet alongside taxes and escrow if needed.

Treat the numbers as planning data. Actual lender math can differ due to payment timing, per-diem interest, mortgage insurance, and escrow changes. Always request a full loan estimate and compare the APR, not only the note rate. If a shorter term raises your payment too much, try a slightly longer term or make voluntary principal prepayments after closing.

Quick strategies: if you expect to sell within a couple of years, a refinance only makes sense when break-even occurs well before your move date. If you will keep the home long-term, focus on total interest over the remaining horizon and consider an affordable shorter term to accelerate equity. You can always prepay principal on a longer term to mimic a shorter schedule while keeping flexibility during tight months.

Monthly payment for principal and interest is PMT = L·r·(1+r)^n / ((1+r)^n − 1) with L loan amount, r=APR÷12, and n months. Break-even months are ceil(costs / (PMT_old − PMT_new)) when savings are positive. Total interest over a horizon H is the sum of monthly interest from an amortization schedule for each scenario. For optional NPV, we discount monthly savings at d=discount÷12 and sum savings_t / (1+d)^t minus upfront costs.