Refinance Break Even Calculator
Calculate when your refinancing savings will exceed the costs of refinancing
Refinance Break Even Analysis
Current Loan Details
New Loan Details
% of loan amount
Additional cash taken out
Break Even Analysis Results
Break Even Date
You will break even on December 4, 2027
Monthly Payment Comparison
Lifetime Interest Analysis
First Year Analysis
Refinancing Analysis
Example Calculation
Scenario
Current loan: $200,000 at 4.5%
New loan: $200,000 at 3.5%
Closing costs: $3,000
Term: 25 years remaining
Break Even Calculation
Current payment: $1,112.45
New payment: $1,010.86
Monthly savings: $101.59
Break even: 30 months
Formula: $3,000 ÷ $101.59 = 29.5 months
Refinancing Tips
Aim for break-even period under 2-3 years
Consider how long you plan to stay in the home
Include all closing costs in your analysis
Compare total interest paid over loan life
Factor in opportunity cost of refinance costs
Understanding Refinance Break Even Analysis
What is a Break Even Point?
The refinance break-even point is when your accumulated monthly savings from the new loan equal the total costs of refinancing. After this point, you begin to see net savings from the refinancing decision.
When Should You Refinance?
- •Interest rates have dropped significantly
- •Your credit score has improved
- •You plan to stay in the home long enough to break even
- •You want to switch from ARM to fixed rate
Break Even Formula
Break Even Months = Total Refinance Costs ÷ Monthly Savings
- Total Costs: Closing costs + upfront fees
- Monthly Savings: Old payment - new payment
- Break Even Date: Today + break even months
Important: Consider both monthly savings and total interest paid over the life of the loan.
Factors to Consider
Costs to Include:
- • Application and origination fees
- • Appraisal and inspection fees
- • Title insurance and attorney fees
- • Recording and processing fees
- • Points (if any)
Additional Considerations:
- • How long you plan to stay in the home
- • Current loan to value ratio
- • Cash flow needs and goals
- • Opportunity cost of refinance funds
- • Tax implications