Refinance Break-Even Calculator (Closing Cost ÷ Monthly Savings)
A refinance makes sense only if you keep the loan long enough to earn back what you paid to close. Months to break even = closing cost ÷ monthly savings. If you sell or refinance again before that date, the new loan has not paid for itself. This is simple cash math, not a discounted NPV.
Months to break even24
Years to break even2
Costs used3,600
Savings used150
How this calculation works
Monthly savings = old payment − new payment (principal and interest you actually compare). Type the difference you already computed.
Break-even months = closing costs / monthly savings. Years = months / 12.
Include points, title, appraisal, and lender fees in closing costs. Ignore sunk costs from the old loan.
If savings is zero or negative, there is no break-even. Taxes, insurance escrow changes, and cash-out amounts are not in this ratio.
Worked example
Closing costs 3,600 and 150 saved per month → 24 months (2 years). Stay at least that long or the refinance is a net loss on fees.
Frequently asked questions
Should I count the tax deduction on points?
This page does not. If points are deductible, true after-tax break-even is a bit faster. Use your tax situation separately.
What if I cash out extra money?
Cash-out is not “savings.” Compare the new payment on the full new balance with the old payment; the break-even on fees can look worse.
Is this NPV?
No. It ignores the time value of money and the extra interest you might pay if the new term resets to 30 years. Pair with an amortization view.
Closing costs financed into the loan?
Then you pay them with interest. A stricter test uses cash costs plus the extra interest on rolled-in fees. This ratio uses the fee total you type as if paid up front.
How do I get monthly savings?
Run old vs new payment on the mortgage calculator, same extra-payment assumptions, then subtract.
Are inputs stored?
No. Browser only.
This tool is provided for general information only. Verify important figures independently. · Last reviewed: August 25, 2026