Refinance Savings Calculator
Find monthly savings and break-even on a refinance.
Results update as you type.
How it works
Refinancing a mortgage can lower your payment, but it costs money to do, so this calculator finds your monthly savings and how long it takes to break even. You enter your current monthly payment, the new payment you would have after refinancing, and the closing costs, and it returns the monthly savings and the break-even time in months. The logic is simple but important: refinancing typically involves closing costs of several thousand dollars, and the lower payment only pays off once those savings have added up to more than the cost. The break-even point is the closing costs divided by the monthly savings, so if refinancing saves $300 a month and costs $6,000, you break even in 20 months. If you plan to keep the home and loan well past the break-even point, refinancing makes financial sense; if you might sell or refinance again before then, you could lose money. This break-even analysis is the single most useful test of whether a refinance is worthwhile. Keep in mind it compares payments, so if the new loan resets to a longer term, the lower payment may come with more total interest even though the monthly cost drops; compare total interest too for a full picture. Enter your payments and closing costs to see your refinance savings and break-even.
Break-even months = closing costs / monthly savings
The monthly savings is your current payment minus the new payment after refinancing. The break-even time is the closing costs divided by that monthly savings, showing how many months it takes for the savings to recoup the cost of refinancing. Only after break-even does the refinance start saving you money net of costs.
Source:Mortgage analysis
We review all our tools from time to time to ensure accuracy.
Worked example
How to use this calculator
- 1
Enter your values
Enter current monthly payment, new monthly payment and refinance closing costs.
- 2
Adjust the options
Fine-tune any options to match your situation.
- 3
Read your result
Monthly savings updates instantly as you type — no button to press.
Frequently asked questions
How do I know if refinancing is worth it?
Compare your break-even time to how long you plan to keep the loan. Divide the closing costs by your monthly savings to get the break-even months. If you will stay in the home well beyond that point, refinancing saves money; if you might move or refinance again sooner, it may not pay off.
What is the refinance break-even point?
The break-even point is the number of months it takes for your monthly savings to recoup the closing costs of refinancing. It equals the closing costs divided by the monthly savings. Before break-even you are still recovering the cost; only after it does the refinance produce net savings.
What closing costs come with a refinance?
Refinance closing costs typically include appraisal fees, origination or lender fees, title insurance, recording fees, and sometimes points. They often total two to five percent of the loan amount, or several thousand dollars. Enter your total estimated closing costs so the break-even calculation reflects the true cost of refinancing.
Does a lower payment always mean I save money?
Not necessarily. If refinancing resets your loan to a longer term, the monthly payment can drop while the total interest paid over the life of the loan rises. A lower payment improves cash flow but may cost more overall. Compare both the monthly savings and the total interest to judge the true benefit.
Should I refinance to a shorter term?
Refinancing to a shorter term, such as from 30 to 15 years, usually raises the monthly payment but sharply cuts total interest and builds equity faster. This calculator focuses on payment savings and break-even; if you are shortening the term, weigh the higher payment against the large interest savings and faster payoff.