{
  "slug": "refinance-breakeven-months",
  "title": "Mortgage Refinance Break-Even Calculator",
  "heading": "Refinance Break-Even Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/refinance-breakeven-months",
  "summary": "How many months of lower payments it takes to earn back the closing costs.",
  "description": "Refinancing trades a lump of closing costs today for a smaller payment tomorrow, so the whole decision reduces to one question: will you still own the loan when the savings have repaid the costs? This calculator computes the new payment at your target rate and term, the monthly saving against your current payment, and the break-even month. It also flags the trap of resetting the clock — dropping from 22 years remaining back to a fresh 30 lowers the payment but can raise lifetime interest even at a lower rate, so the total-interest comparison is shown alongside.",
  "formula": "New payment = P×r ÷ (1 − (1+r)^−n). Monthly saving = old payment − new payment. Break-even months = closing costs ÷ monthly saving.",
  "dateModified": "2026-08-25",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=refinance-breakeven-months",
  "inputs": [
    {
      "id": "balance",
      "label": "Remaining loan balance",
      "kind": "number",
      "hint": null,
      "default": 320000,
      "unit": "$",
      "min": 1000,
      "max": null
    },
    {
      "id": "currentPayment",
      "label": "Current principal & interest payment",
      "kind": "number",
      "hint": null,
      "default": 2150,
      "unit": "$/mo",
      "min": 1,
      "max": null
    },
    {
      "id": "currentRemaining",
      "label": "Years left on current loan",
      "kind": "number",
      "hint": null,
      "default": 24,
      "unit": "years",
      "min": 1,
      "max": null
    },
    {
      "id": "newRate",
      "label": "New interest rate",
      "kind": "number",
      "hint": null,
      "default": 5.75,
      "unit": "%",
      "min": 0.1,
      "max": null
    },
    {
      "id": "newTerm",
      "label": "New loan term",
      "kind": "number",
      "hint": null,
      "default": 30,
      "unit": "years",
      "min": 5,
      "max": null
    },
    {
      "id": "costs",
      "label": "Closing costs",
      "kind": "number",
      "hint": "Origination, appraisal, title, recording",
      "default": 6400,
      "unit": "$",
      "min": 0,
      "max": null
    }
  ],
  "outputs": [
    {
      "id": "breakEven",
      "label": "Months to break even",
      "format": "number",
      "hint": null,
      "primary": true
    },
    {
      "id": "newPayment",
      "label": "New monthly payment",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "saving",
      "label": "Monthly saving",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "lifetimeDelta",
      "label": "Lifetime cost difference",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "oldTotal",
      "label": "Total remaining on current loan",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "newTotal",
      "label": "Total on new loan incl. costs",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Remaining loan balance: 320000 $",
      "Current principal & interest payment: 2150 $/mo",
      "Years left on current loan: 24 years",
      "New interest rate: 5.75 %",
      "New loan term: 30 years",
      "Closing costs: 6400 $"
    ],
    "outputs": [
      "Months to break even: 23",
      "New monthly payment: $1,867.43",
      "Monthly saving: $282.57",
      "Lifetime cost difference: -$59,475.93",
      "Total remaining on current loan: $619,200.00",
      "Total on new loan incl. costs: $678,675.93"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter remaining loan balance ($).",
      "Enter current principal & interest payment ($/mo).",
      "Enter years left on current loan (years).",
      "Enter new interest rate (%).",
      "Enter new loan term (years).",
      "Enter closing costs ($) — Origination, appraisal, title, recording.",
      "Read your months to break even 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,
        "currentPayment": 1300,
        "currentRemaining": 14,
        "newRate": 3.4499999999999997,
        "newTerm": 20,
        "costs": 3750
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "balance": 320000,
        "currentPayment": 2150,
        "currentRemaining": 24,
        "newRate": 5.75,
        "newTerm": 30,
        "costs": 6500
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "balance": 510000,
        "currentPayment": 3450,
        "currentRemaining": 38,
        "newRate": 9.200000000000001,
        "newTerm": 50,
        "costs": 10250
      }
    }
  ],
  "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": "What break-even period is acceptable?",
      "a": "A common rule is to refinance only if you will hold the loan at least twice the break-even period. Under 24 months is comfortable for most owners; past 48 months the decision depends heavily on whether you actually stay, and the median US homeowner moves or refinances again well before a 30-year term ends."
    },
    {
      "q": "Why can a lower rate cost more overall?",
      "a": "Because a new 30-year term restarts amortisation. Interest is front-loaded, so resetting the clock means paying another decade of interest-heavy payments. Compare the lifetime figure, and consider matching the new term to the years you have left."
    },
    {
      "q": "Should I roll closing costs into the loan?",
      "a": "It preserves cash but you finance the fee for the full term, so the true cost is higher than the sticker. If you roll them in, add them to the balance input here to see the honest payment and break-even."
    },
    {
      "q": "What about a no-closing-cost refinance?",
      "a": "Those trade fees for a higher rate. Run this twice — once with real costs at the lower rate, once with zero costs at the higher rate — and compare the lifetime numbers over the period you expect to keep the loan."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/extra-payment-impact",
    "https://www.revenuelab.fyi/toolbox/buy-vs-lease-car",
    "https://www.revenuelab.fyi/toolbox/rent-vs-buy"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Mortgage Refinance Break-Even Calculator (https://www.revenuelab.fyi/toolbox/refinance-breakeven-months)"
}