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Refinance break-even calculator

Plug in your current loan, your new rate, and your closing costs. See exactly when the refinance starts paying you back.

Break-even calculator

Plug in your numbers. The verdict updates automatically — no signup, no upload.

Your numbers

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years
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years
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years

Results

Current monthly P&I

$2,015

New monthly P&I

$1,799

Payment change

−$216

Break-even

23 months

Net savings over 7 years

+$13,157

Refinancing looks worthwhile

At these inputs, the closing costs pay back well before you expect to leave the home.

Audit my refinance Loan Estimate ($39)

Looking good — but your lender may still be padding fees. Audit your refinance Loan Estimate to keep more of those savings. → Fair Loan Check

Numbers from a real refinance Loan Estimate? Run the audit to catch padded lender fees before you sign — Fair Loan Check Quick Check ($19) or Full Analysis ($39).

How the calculator works

The calculator computes your current monthly principal-and-interest payment from your current rate and balance, then computes the new monthly payment from your refinance offer. The break-even point is the number of months your monthly savings need to accumulate to cover what you spent at closing.

If the break-even point is shorter than how long you plan to be in the home, the refinance pays off. If it is longer, you would be paying closing costs to save money you will not be in the loan long enough to collect.

What to enter, and where to find it

Current rate and balance come straight from your most recent mortgage statement. Remaining term is whatever you have left — a 30-year loan five years in has 25 years remaining. New rate and term come from the Loan Estimate the refinance lender sent you. Closing costs come from the same Loan Estimate, totaled across Sections A, B, C, and E (origination, services you cannot shop for, services you can shop for, and government taxes and fees).

Expected time in home is your honest estimate of how long you will keep this mortgage. If you are likely to move or refinance again within 3 to 5 years, set it accordingly — a refinance with a 7-year break-even is a poor trade if you sell in 4.

Then what?

If the verdict comes back marginal or worthwhile, the next question is whether the closing costs the lender quoted are accurate. Refinance Loan Estimates routinely include $500 to $2,000 in negotiable lender fees. The full guide at the refinance hub covers what to look for; Fair Loan Check audits the entire estimate against state-specific benchmarks if you want a second opinion before signing.

For the full guide on what refinance closing costs actually include, what is negotiable, and which states carry refinance-specific tax mechanisms, read the refinance hub.

Frequently asked

What is a refinance break-even point?

The break-even point is the number of months it takes for your monthly savings on the refinance to cover the closing costs you paid. If you spent $5,000 to close and save $200 a month, the break-even is 25 months. Past that point, every month is net savings. Before that point, the refinance is in the red.

Does this calculator include closing costs?

Yes. Closing costs are the central input — the calculator divides them by monthly savings to find the break-even point. Enter the total estimated closing costs from your refinance Loan Estimate (Sections A through E combined). If you have not received a Loan Estimate yet, $4,000 to $6,000 is a reasonable starting estimate for a typical refinance.

Should I include taxes and insurance in the calculation?

No. The calculator works on principal and interest only — the part of the payment that actually changes when you refinance. Property taxes and homeowners insurance are largely the same before and after the refinance (unless your escrow analysis changes), so they would cancel out of any savings calculation.

What rate drop do I need for a refinance to make sense?

There is no universal threshold. The right rate drop depends on your loan balance, your closing costs, and your time horizon. As a rough cut, a 0.5% drop on a $300,000 loan with $5,000 in closing costs breaks even in roughly 50 months. A 1% drop in the same scenario breaks even in roughly 25 months. The calculator does the exact math for your specific numbers.

Why does the calculator ask for my expected time in home?

The break-even point only matters in relation to how long you will keep the loan. A 36-month break-even is great if you plan to stay 10 years, and bad if you plan to sell in 18 months. The verdict the calculator gives you is based on whether the break-even comes before or after you expect to leave.

Informational only. Not financial, tax, or legal advice. Refinance decisions depend on your specific loan terms, tax situation, and timeline. Verify all figures with a licensed mortgage professional before signing.