{
  "slug": "refinance-break-even-calculator",
  "title": "Mortgage Refinance Break-Even Calculator",
  "heading": "Mortgage Refinance Break-Even Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/refinance-break-even-calculator",
  "summary": "How many months until the new rate pays back your closing costs.",
  "description": "Refinancing only makes sense if you stay in the home past the break-even point — the month where cumulative payment savings finally exceed the closing costs you paid to get the lower rate. This calculator compares your current loan against a new loan on the remaining balance, accounts for the fact that a fresh 30-year term restarts amortization (lower payment, more total interest), and reports both the simple break-even in months and the lifetime interest difference. Enter the balance you would refinance, your current rate and remaining term, the new rate and term, and total closing costs including origination, appraisal, title, and any points. A common rule of thumb says refinance when you can cut the rate by 0.75-1.00 points, but the honest test is personal: if your break-even lands past the date you expect to sell or refinance again, the deal loses money no matter how much lower the rate looks.",
  "formula": "Break-Even Months = Closing Costs ÷ (Current Payment − New Payment). Payment = P·r ÷ (1 − (1+r)^−n).",
  "dateModified": "2026-09-06",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=refinance-break-even-calculator",
  "inputs": [
    {
      "id": "balance",
      "label": "Loan balance to refinance",
      "kind": "number",
      "hint": null,
      "default": 320000,
      "unit": "$",
      "min": 10000,
      "max": 3000000
    },
    {
      "id": "curRate",
      "label": "Current interest rate",
      "kind": "number",
      "hint": null,
      "default": 7.1,
      "unit": "%",
      "min": 0.5,
      "max": 15
    },
    {
      "id": "curYears",
      "label": "Years left on current loan",
      "kind": "number",
      "hint": null,
      "default": 27,
      "unit": "years",
      "min": 1,
      "max": 40
    },
    {
      "id": "newRate",
      "label": "New interest rate",
      "kind": "number",
      "hint": null,
      "default": 5.9,
      "unit": "%",
      "min": 0.5,
      "max": 15
    },
    {
      "id": "newYears",
      "label": "New loan term",
      "kind": "number",
      "hint": null,
      "default": 30,
      "unit": "years",
      "min": 5,
      "max": 40
    },
    {
      "id": "costs",
      "label": "Closing costs (incl. points)",
      "kind": "number",
      "hint": null,
      "default": 6500,
      "unit": "$",
      "min": 0,
      "max": 60000
    }
  ],
  "outputs": [
    {
      "id": "breakEvenMonths",
      "label": "Break-even point",
      "format": "number",
      "hint": "months",
      "primary": true
    },
    {
      "id": "monthlySaving",
      "label": "Monthly payment saving",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "newPayment",
      "label": "New monthly payment (P&I)",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "curPayment",
      "label": "Current monthly payment (P&I)",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "lifetimeDiff",
      "label": "Lifetime interest saved after costs",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Loan balance to refinance: 320000 $",
      "Current interest rate: 7.1 %",
      "Years left on current loan: 27 years",
      "New interest rate: 5.9 %",
      "New loan term: 30 years",
      "Closing costs (incl. points): 6500 $"
    ],
    "outputs": [
      "Break-even point: 20.1",
      "Monthly payment saving: $324",
      "New monthly payment (P&I): $1,898",
      "Current monthly payment (P&I): $2,222",
      "Lifetime interest saved after costs: $30,106"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter loan balance to refinance ($).",
      "Enter current interest rate (%).",
      "Enter years left on current loan (years).",
      "Enter new interest rate (%).",
      "Enter new loan term (years).",
      "Enter closing costs (incl. points) ($).",
      "Read your break-even point on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "balance": 190000,
        "curRate": 4.26,
        "curYears": 16,
        "newRate": 3.54,
        "newYears": 20,
        "costs": 4000
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "balance": 320000,
        "curRate": 7.1,
        "curYears": 27,
        "newRate": 5.9,
        "newYears": 30,
        "costs": 6500
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "balance": 510000,
        "curRate": 11.36,
        "curYears": 40,
        "newRate": 9.440000000000001,
        "newYears": 40,
        "costs": 10500
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "Why can my payment drop but lifetime interest rise?",
      "a": "Restarting a 30-year term on a loan you had already paid down for several years stretches the balance over more months. The payment falls, yet total interest can exceed what you would have paid on the old schedule. Compare the lifetime figure, not just the payment."
    },
    {
      "q": "Should I roll closing costs into the loan?",
      "a": "It preserves cash but adds to the balance and to interest. The break-even math here treats costs as paid up front; if you finance them, add the amount to the balance instead and set costs to zero."
    },
    {
      "q": "What about a no-cost refinance?",
      "a": "Lenders cover costs by raising your rate. Set closing costs to zero and enter the higher quoted rate — the comparison stays valid and often shows the no-cost option winning for shorter holding periods."
    },
    {
      "q": "Does this include taxes and insurance?",
      "a": "No. It compares principal and interest only, which is where a refinance changes your payment. Escrow amounts stay roughly the same either way."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/debt-settlement-savings-calculator"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Mortgage Refinance Break-Even Calculator (https://www.revenuelab.fyi/toolbox/refinance-break-even-calculator)"
}