Typically 2 to 3% of your loan balance. The default is a rough estimate. Ask your lender for an actual quote.
$0
New monthly payment (P&I)
Monthly Savings
$0
Break-Even Point
N/A
Current Loan: Total Interest Remaining
$0
New Loan: Total Interest Paid
$0
Lifetime Interest Savings (after closing costs)
$0
Calculating...

This calculator provides estimates for informational purposes only. Results are not a commitment to lend. Contact a licensed mortgage professional for accurate figures. Loan products and rates subject to change.

Want Jordan to Pull Real Refinance Rates for Your File?

Calculator rates are illustrative. Your actual rate depends on your credit, loan-to-value, and what the market's doing right now. We can get you a real quote, usually same day.

Before refinancing, it helps to understand how mortgage payments are structured, what to expect at closing, and how the mortgage approval process works.

How To Read Your Break-Even Result

The break-even point is the number of months it takes for your monthly savings to pay back what you spent to refinance. If you plan to stay in the home past that point, refinancing is almost always the right move mathematically. If you're unsure how long you'll stay, the number gives you a target to reason against.

The one to watch

The rate difference is the engine. The break-even is the test.

A bigger rate drop means bigger monthly savings, which means a shorter break-even. But closing costs can stretch that timeline significantly. The calculator shows you both numbers together so you can weigh the actual trade-off, not just the headline rate.

What This Calculator Doesn't Include

This tool models principal and interest only. It doesn't account for taxes, insurance, HOA, or PMI, which may change if your new loan-to-value or loan type changes. It also doesn't factor in opportunity cost: money spent on closing costs could have been invested. For a full picture, talk to a lender who can run your actual file, not just the simplified math.

Four Inputs That Move Your Break-Even

Every field in this calculator pulls on the result. Here's what each one does.

Loan Balance: the foundation of the calculation
Your remaining loan balance is what the new loan is written against. A larger balance means larger savings from a rate drop in dollar terms, which can shorten your break-even even if the percentage difference looks the same. If you've paid down a significant chunk of your loan, the dollar savings per month may be smaller than you expect at a glance. Run the actual number here rather than estimating.
Rate Difference: the engine that drives monthly savings
The gap between your current rate and the new rate is the primary driver of monthly savings. A 0.5% drop on a $300,000 balance saves roughly $90 to $100 a month. A 1.5% drop saves closer to $270. Those monthly savings are what get measured against your closing costs. The bigger the gap, the faster the break-even, but the new rate has to be a real quoted rate, not a headline from an ad.
Closing Costs: the hurdle you have to clear
Closing costs on a refinance typically run 2 to 3 percent of your loan balance. On a $300,000 loan that's $6,000 to $9,000. Some lenders offer no-closing-cost refinances where the costs are rolled into the rate, so you pay less upfront but your monthly savings are smaller. This calculator uses a cash-out-of-pocket approach. Change the default $5,000 to a real estimate from your lender for the most accurate break-even.
New Loan Term: the shape of your savings
Choosing a shorter term almost always increases your monthly payment even when the rate drops, because you're compressing the payoff. A 15-year refinance from a 30-year will have a higher monthly payment but dramatically less total interest over the life of the loan. A 30-year refinance maximizes monthly savings but extends your payoff date. Both can be the right answer depending on your goals. Run both in this calculator to compare.

When To Trust This Number, and When Not To

Trust the break-even math for quick comparisons and to frame the conversation with your lender. The formula is accurate given the inputs. Don't trust it as a final decision without a real Loan Estimate from an actual lender, because the closing costs and rate you'll actually get can differ from the defaults. A rate quote takes about 15 minutes and gives you the real inputs to run this calculator properly.

Ready to get a real number? See how the mortgage approval process works, or go straight to starting your application and we'll pull real rates for your file.

Start My Pre-Approval Call Now

Refinance Calculator FAQ

Common questions about what this calculator shows, what it doesn't, and how to use your break-even number.

What does the break-even point actually mean?
The break-even point is the number of months it takes for your monthly savings from a lower rate to cover the closing costs you paid to refinance. If it costs $6,000 to refinance and you save $200 a month, your break-even is 30 months. If you plan to stay in the home longer than that, refinancing makes financial sense.
How accurate are the closing costs in this calculator?
The default of $5,000 is a rough estimate. Actual closing costs on a refinance typically run 2 to 3 percent of your loan balance and vary based on your state, lender, loan type, and whether you roll costs into the loan. Ask your lender for a Loan Estimate before making a decision.
Should I refinance to a shorter loan term?
Refinancing to a 15-year term from a 30-year almost always increases your monthly payment even when the rate drops significantly, because you're compressing the payoff timeline. The trade-off is dramatically less total interest over the life of the loan and faster equity build. Run both scenarios in this calculator to see what your cash flow looks like either way.
What if my new payment comes out higher than my current payment?
A higher new payment usually means either the new rate isn't low enough to offset a shorter term, or you're extending the term but your remaining balance is large. This calculator will flag that scenario. A refinance that raises your payment is only worth it if you have a specific goal like paying off the home faster or eliminating mortgage insurance.
Does refinancing restart my loan from the beginning?
Yes, a standard rate-and-term refinance resets your loan to a new term starting from zero. If you're 8 years into a 30-year loan and you refinance into a new 30-year, your total payoff timeline extends. Some borrowers refinance into a shorter term to avoid this. Others accept the reset because the monthly savings or cash-out proceeds justify it.
Can I refinance if I recently bought my home?
Most conventional and FHA loans allow refinancing after 6 months of on-time payments, though some lenders require 12 months. VA and USDA loans have their own seasoning requirements. If rates have dropped significantly since you purchased, it's worth asking a lender whether you qualify to refinance, even early on.
Is there a minimum rate drop that makes refinancing worth it?
The old rule of thumb was one percent, but it's misleading. What actually determines whether refinancing is worth it is the break-even point relative to how long you plan to stay in the home. A 0.5% drop on a large balance with low closing costs can break even in under a year. A 1.5% drop with high closing costs might take four years. Use this calculator to find your specific number.
How long does a refinance take to close?
A standard refinance takes 21 to 45 days with most lenders. At 14 Days To Close, qualifying refinances can close in as few as 14 business days. Speed depends on how quickly appraisal and title work move and how fast you can provide documentation. Having your paperwork ready upfront is the biggest factor in your control.

Find Out If a Refinance Makes Sense for Your Loan

A 15-minute call can tell you more than any calculator.

Start My Pre-Approval Book a Free Call Call Now
Jordan Vreeland, Licensed Mortgage Broker