Everyday tool · ≈ 3 min · Home & mortgage
Mortgage Refinance Break-Even Calculator
See the monthly change, the months to recover closing costs, and — just as important — the lifetime cost of restarting your term.
Typically 2–5% of the loan amount.
Showing example defaults — change any input to use your own
Refinance comparison
Estimated monthly payment savings
$326
The new loan of $280,000 at 5.75% pays $1,634/month; at that pace it takes about 1 yr 7 mo of savings to recover the $6,000 in costs. Over the full term, refinancing costs about $9,544 less than finishing your current loan, under these assumptions.
This refinance extends your term
Your current loan would finish in about 25 yr 9 mo; the new one runs 30 years. A lower payment over more years can cost more in total — the lifetime figure below includes that effect.- New monthly payment (P&I)
- $1,634
- Break-even on closing costs
- 1 yr 7 mo
- Remaining interest, current loan
- $323,786
- Total interest, new loan
- $308,241
- Lifetime savings (incl. costs)
- $9,544
Total remaining cost: keep vs. refinance
View data table
| Interest + costs | |
|---|---|
| Keep current loan | $324K |
| Refinance (interest + costs) | $314K |
What this may mean for you
Refinancing helps most when the rate drop is meaningful, you'll stay past the break-even point, and the term doesn't stretch. If you might move before 1 yr 7 mo, the costs likely outweigh the savings. Refinancing is a comparison, not a default — and a shorter-term refinance is often where the real lifetime savings live.
Results are estimates for educational purposes and may not reflect your complete financial or tax situation.
Understanding this calculator
A lower payment is the headline of every refinance offer; the fine print is what it costs to get it. Closing costs typically run 2–5% of the loan, and a fresh 30-year term restarts the interest-heavy early years — so a refinance can lower your monthly bill while quietly raising what you'll pay over the life of the loan. This calculator shows both sides on purpose.
Two numbers deserve your attention before any paperwork: the break-even point (how many months of savings it takes to recover the costs — if you might move sooner, stop here) and the lifetime difference, which compares your remaining interest on the current loan against the new loan's full cost. When the term extends, that second number is frequently negative even though the payment falls.
Assumptions and methodology
- The new payment uses standard amortization on your balance (plus closing costs when financed).
- Break-even months = closing costs ÷ monthly payment savings.
- Lifetime difference = remaining interest on the current loan − (new loan's total interest + closing costs). Positive means the refinance costs less in total under these assumptions.
- Assumes fixed rates and that you keep each loan to payoff; taxes, points strategy, and ARM behavior are not modeled.
- Refinancing is not automatically beneficial — a longer term, fees, or plans to move can outweigh a lower rate.
Official sources
Last reviewed August 30, 2026. Year-specific figures show their tax or data year in the tool; data is reviewed when the IRS, SSA, and CMS publish annual updates.
Common questions
My payment drops — how can the refinance cost more?
A new 30-year term stretches the balance over more years, and early payments are mostly interest. Lower payment, more months, more total interest. The lifetime-difference figure catches this.
What about refinancing into a shorter term?
That's often where refinancing shines: a 30-to-15 move at a lower rate can cut lifetime interest dramatically — if the higher payment fits your budget. Model it here by setting the new term to 15 years.
Next step
See how this fits your whole retirement
One number is a start. The plan builder puts income, spending, savings, and taxes together year by year — free, no account, and every answer can be changed later.
Keep going
- Mortgage PaymentEstimate your full monthly payment — principal, interest, taxes, insurance, HOA, and PMI — plus total interest over the loan.Calculator
- Mortgage PayoffSee how extra monthly or one-time payments shorten your mortgage and cut total interest.Calculator
- Home AffordabilityEstimate a home-price range from your income, debts, and down payment using standard lending guidelines.Calculator
Want a professional's take? Downshift can introduce you to a financial advisor, CPA, or retirement planner who can talk through what these numbers mean for you — free to you, no obligation.
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