Refinance break-even
When a refinance pays for itself, and what it really costs over time.
Share or save these exact numbers. The link keeps every input, so whoever opens it sees the same result and can change any number to compare options.
Your current loan
How much you still owe on your current loan.
The interest rate on your current loan.
How many years are left on your current loan.
The new loan
The interest rate you have been offered on the new loan.
How many years the new loan lasts. Starting over at 30 years lowers your payment but adds years of interest.
The total fees to take out the new loan, in dollars. Your lender must give you an estimate.
Closing costs
Pay the fees in cash at closing, or add them to the new loan. Adding them means a bigger balance and more interest over time.
Extra money you would borrow against your home's value when refinancing and keep as cash. Enter 0 if none.
How long you expect to keep this loan before selling or refinancing again. The savings only count for the time you hold it.
Monthly payment change
-$293
$1,972 now → $1,679 after refinancing
Deal check
Rules-based reviewWorth it
You recover the costs well inside your timeline.
- The payment drops by $293 a month.
- Closing costs of $4,500 take 1 yr 3 mo to earn back. You plan to hold 7 years.
- Counting everything over 7 years, you come out $18,591 ahead.
- A fresh term adds 3 years. Lifetime interest goes from $358,845 to $324,347, so a lower payment is not the same as a cheaper loan.
What would change the answer
- →Each $1,000 you negotiate off closing costs shortens break-even by about 3.4 months.
- →If you want the lower payment without restarting the clock, ask for a term that matches your remaining years, or keep paying the old payment amount.
Terms used:Refinance break-even pointCash-out refinanceClosing costsAmortizationLoan term
An estimate from your inputs, not financial, tax or legal advice. Verify every number with real comps, quotes and the source records.
1 yr 3 mo
Break-even point
$18,591
Net 7-year result
$358,845
Interest left (current)
$324,347
Interest (new loan)
- New loan amount
- $280,000
- Closing costs
- $4,500
- Cash you receive
- $0
- Loan term change
- +3 yrs
What this means
It takes about 1 yr 3 mo of lower payments to recoup the closing costs. If you will keep the loan longer than that, the refinance starts to pay for itself.
Starting a fresh 30-year loan adds 3 years to your payoff date. A lower payment can still cost more in total interest ($324,347 vs $358,845). Compare the net result at your real time horizon, shown above.
This model keeps rates fixed and ignores taxes. If the current loan ends before your horizon, later years are not counted for either side.
For education and planning only. Results are estimates based on the numbers you enter and are not financial, tax, legal or lending advice. Loan rules, rates and taxes vary, so confirm details with a licensed professional.
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