Refinance Break-Even Calculator

See how many months a lower payment takes to cover closing costs and points, and whether the new loan saves money overall.

Results

Enter your numbers to see the results.

Estimate only, not lending or financial advice. Payments here are principal and interest only, using the same fixed-rate formula as the Loan Payment calculator. Taxes, insurance, and escrow changes are not included. If you roll costs into the new loan, you pay interest on them. A different loan amount, a rate lock that changes, or paying extra principal will change the result. This page is for a home loan refinance, not an auto loan.

Last reviewed: November 11, 2026

A refinance can cut your monthly principal-and-interest payment, but closing costs — and any discount points you buy — have to be earned back. Enter your current balance, rate and months left, then the new rate, the new term, closing costs and points. You can pay those costs in cash at closing or roll them into the new loan. The tool shows both payments, the monthly savings, the points cost, total upfront costs, the break-even month, remaining payments on the current loan versus the total cost of the new one, and lifetime net savings, plus a plain-language verdict. If the new term is longer than the months you already have left, it also flags how many months that adds versus your current payoff date.

How to use it

Enter the current loan balance, current interest rate, and months left on the current loan.
Enter the new interest rate and the new term in years (10, 15, 20, 25 or 30, or a custom term from 1 to 40). The default new term is 30 years.
Enter closing costs excluding points, then any discount points (1 point = 1% of the current loan balance). Points can be 0.
Choose how you pay those costs: cash at closing (the default) or roll into the loan.
Read the two principal-and-interest payments, monthly savings, break-even month (when there is one), lifetime net savings, and the verdict line.

How it works

Both payments use the shared Loan Payment PMT engine: monthly rate = interest rate ÷ 12, rounded half-up to the cent. At 0%, the payment is principal ÷ the number of months, also rounded half-up.
The current payment is PMT(current rate ÷ 12, months left, current balance).
Points cost = current balance × points %, rounded half-up. Total upfront costs = closing costs + points cost.
The new loan amount is the current balance, plus total costs if you roll them in. The new payment is PMT(new rate ÷ 12, new term in months, new loan amount).
Monthly savings = current payment − new payment (both already rounded).
Break-even months = total costs ÷ monthly savings, rounded up to a whole month, so you have only broken even once the full cost is recovered. If monthly savings are $0.00 or negative, there is no break-even month. If costs are $0.00 and savings are positive, the result is “Breaks even immediately.” If the break-even month is after the new loan’s term, the tool says it never breaks even within the loan.
Current total = current payment × months left. New total = new payment × new months, plus total costs if you paid cash (or + $0.00 if costs were rolled in, because they are already inside the payments).
Lifetime net savings = current total − new total, which can be negative.

Savings above $0 and lifetime savings above $0: “You break even in N months (X years Y months). Stay longer than that and you come out ahead.”
Savings above $0 but lifetime savings below $0: the lower payment is real, but a longer term costs more overall.
Savings of $0 or less and lifetime savings above $0 (a shorter term): “Your payment goes up $X/month, but you save $Y overall by paying off sooner.” No break-even month is shown.
Savings of $0 or less and lifetime savings of $0 or less: “This refinance doesn't save money.”
When the new term in months is longer than months left, also show “adds N months vs your current payoff date.”

Is buying mortgage points worth it?

Discount points are an upfront cost: 1 point equals 1% of the current loan balance, rounded half-up to the cent. This page uses the same break-even engine for points as for other closing costs — there is no separate mortgage points calculator. Add the points you are considering, leave other closing costs in the other field, and compare cash at closing with rolling the total in. Buying points only pays off if you keep the new loan long enough to recover that extra cost, and if the lifetime comparison is still in your favor. Case 2 below is the worked points example.

Worked examples

A 30-year refinance paid in cash (case 1).

$300,000 left at 7.25%, with 336 months remaining, refinanced to 6.25% for 30 years, with $6,000 of closing costs paid in cash and no points. The current payment is $2,088.47. The new payment is $1,847.15. Monthly savings are $241.32. Break-even is 25 months (2 years 1 month). Current remaining payments total $701,725.92. The new loan costs $670,974.00 including the cash costs. Lifetime net savings are $30,751.92. The new 360-month term adds 24 months vs your current payoff date. Verdict: You break even in 25 months (2 years 1 month). Stay longer than that and you come out ahead.

Buying 1 point, paid in cash (case 2).

$250,000 left at 6.875%, with 300 months remaining, refinanced to 5.875% for 25 years, with $4,500 of closing costs plus 1 point. The points cost is $2,500.00, so total upfront costs are $7,000.00. The current payment is $1,747.06. The new payment is $1,591.71. Monthly savings are $155.35. Break-even is 46 months. Lifetime net savings are $39,605.00. The new term is 300 months, the same as the months already left, so it does not add months.

Closing costs rolled into the loan (case 3).

$200,000 left at 6.5%, with 360 months remaining, refinanced to 6.0% for 30 years, with $3,000 of costs rolled in and no points. The new loan amount is $203,000.00. The current payment is $1,264.14. The new payment is $1,217.09. Monthly savings are $47.05. Break-even is 64 months. Lifetime net savings are $16,938.00. Because the costs are inside the new payments, they are not added again to the new total.

A rate that goes the wrong way (case 4).

$180,000 left at 5.5%, with 240 months remaining, refinanced to 6.0% for 20 years, with $2,500 of costs. The new payment is $1,289.58, which is $51.38 a month higher than the current $1,238.20 (monthly savings −$51.38). There is no break-even month. Lifetime net savings are −$14,831.20. Verdict: This refinance doesn't save money.

A shorter term with a higher payment (case 5).

$400,000 left at 7.0%, with 348 months remaining, refinanced to 6.0% for 15 years, with $8,000 of costs. The current payment is $2,688.52. The new payment is $3,375.43, so the payment goes up $686.91 a month and there is no break-even month. Lifetime net savings are $320,027.56, because the 15-year term pays the loan off much sooner than the 348 months left. Verdict: Your payment goes up $686.91/month, but you save $320,027.56 overall by paying off sooner.

Break-even and lifetime savings at a glance

Break-even and lifetime savings at a glance
Example	Monthly savings	Break-even	Lifetime net savings
$300,000 to 6.25% 30-year, $6,000 cash	$241.32	25 months	$30,751.92
$250,000 to 5.875% 25-year, $4,500 + 1 point cash	$155.35	46 months	$39,605.00
$200,000 to 6.0% 30-year, $3,000 rolled in	$47.05	64 months	$16,938.00
$180,000 to 6.0% 20-year (rate up)	−$51.38	None	−$14,831.20
$400,000 to 6.0% 15-year (shorter term)	−$686.91	None	$320,027.56

FAQ

How do I calculate a refinance break-even?

Divide the total upfront costs (closing costs plus points) by the monthly payment savings, and round up to the next whole month. In the first example, $6,000 of costs and $241.32 of monthly savings break even in 25 months. Then check lifetime net savings, because a longer new term can still cost more overall.

Is it worth buying mortgage points?

Only if you keep the new loan long enough to recover the points cost — and if the lifetime comparison still favors the refinance. One point is 1% of the current balance. In case 2, 1 point costs $2,500.00, total costs are $7,000.00, and the break-even is 46 months, with $39,605.00 of lifetime net savings.

Should I roll closing costs into the loan or pay cash?

Paying cash keeps the new loan amount equal to your current balance. Rolling costs in raises the new balance and the new payment, so monthly savings shrink, but you do not write a check at closing. Case 3 rolls in $3,000 and starts a $203,000.00 loan. Compare both options with your own costs before deciding.

Why can my payment go down but I still lose money overall?

Resetting the clock to a new 30-year term adds months of payments. The monthly savings can look attractive while the total of those extra payments, plus costs, is larger than staying put. The lifetime figure is the check on that. The first example also adds 24 months vs your current payoff date.

Why would a higher payment still be a better refinance?

A shorter term can raise the payment and still cut total interest a lot. In case 5 the payment goes up $686.91 a month, there is no break-even month, and lifetime net savings are still $320,027.56. The verdict line states that tradeoff directly.

When is there no break-even month?

When the new payment is not lower than the current one, as in cases 4 and 5, or when savings are zero. If the new rate is higher and the term is not shorter enough to help, the verdict is “This refinance doesn't save money.”

Does this include taxes and insurance?

No. Both sides are principal and interest only. If a refinance also changes escrow, compare that separately. For the payment math alone, you can also use the Loan Payment calculator.

Is this the same as an auto loan refinance calculator?

No. This page is for a home loan, including discount points. An auto refinance is a different product and lives on its own tool.