RefinanceCalculatorTools

Free Refinance Break-Even Calculators

A lower payment and a cheaper loan are not the same refinance

Four calculators for the decision: the monthly saving and how long the closing costs take to recover, whether points pay off, what resetting the term actually costs, and what happens if you pay the saving back into principal.

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Refinance Calculator

Find the monthly saving from refinancing, how long the closing costs take to recover, and what the new term does to total interest.

Your numbers

Results update as you type. Nothing is sent anywhere.

Result

Monthly saving

$287

Payments to break even

21 months

Break-even
1.8 years
Current payment
$2,039
New payment
$1,752
Annual saving
$3,443
Interest on the current loan
$385,047
Interest on the new loan
$288,638
Lifetime difference after costs
$90,408
Closing costs
$6,000

You recover the 6000 in closing costs after 21 payments.

Read the full guide, worked examples and FAQ for this calculator →

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Refinancing is presented as a saving and is really a trade. A lower rate reduces interest; a fresh long term adds years of it. Closing costs are paid up front and recovered slowly. Points buy a lower rate and are forfeited if you refinance again.

These tools price each part. The single most useful habit is to refinance into the term remaining rather than a fresh thirty years, and then to keep paying the old payment - which captures the rate saving without the extension and shortens the loan considerably.

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Refinance

Break-even, savings and the real cost of resetting a term.

Why use RefinanceCalculatorTools

Break-even, plainly stated

Closing costs divided by the monthly saving is the number of payments before the refinance is worth anything. If you might move sooner, it is a loss.

The term reset priced

Resetting to thirty years lowers the payment and can raise total interest even at a much lower rate. Both figures are shown side by side.

Points judged against repeat refinancing

Anyone who has refinanced once is more likely to do it again, and each buydown is forfeited at the next one. Break-even matters more here than on a purchase.

What to do with the saving

Redirected into principal it collapses the term. Absorbed into spending it leaves a longer, more expensive loan.

How it works

  1. Calculate the monthly saving and the break-even before anything else.
  2. Ask the lender for a custom term matching the years remaining, not a fresh thirty.
  3. If points are offered, check the break-even against how long you realistically stay.
  4. Set the new payment to the old amount so the saving goes to principal automatically.

Frequently asked questions

What rate drop makes refinancing worth it?

There is no universal threshold. It depends on the balance, the closing costs and how long you stay - a large balance justifies a much smaller rate drop because the dollar saving is larger.

Why can a lower rate cost more overall?

Because resetting to a fresh thirty-year term adds years of interest. A borrower twenty-two years into a mortgage who refinances into thirty has added eight years of payments.

Can I refinance into the term I have left?

Most lenders will write a custom term on request. It is rarely offered proactively because it produces a higher payment than a fresh thirty-year loan.

Is a no-cost refinance better?

Sometimes. The lender covers costs in exchange for a higher rate, which is frequently the better choice when the break-even on a paid-cost refinance is long.

Are you a lender or broker?

Neither. This site does not originate loans, accept applications or pass details to anyone. It is funded by advertising.