Refinance Break-Even Calculator: Is Refinancing Worth It?
A lower rate sounds great. But closing costs are real. Find out exactly when a refinance starts paying you back.
Refinance break-even calculator
Estimates for learning only — not a loan offer. Real numbers come from a lender's Loan Estimate.
What is the break-even point?
Refinancing usually costs a few thousand dollars in closing costs. The break-even point is how many months of lower payments it takes to earn that money back. If you plan to stay in the home longer than that, the refinance can make sense.
Watch outRefinancing a loan with 25 years left into a new 30-year loan lowers your payment — but restarts the clock. You might pay more interest in total. Check the “total” rows above.
When refinancing usually makes sense
- You can cut your rate meaningfully and will stay past the break-even point.
- You want to switch from an adjustable rate to a fixed rate.
- You want to drop FHA mortgage insurance by moving to a conventional loan once you have enough equity.
Quick questions
How much does refinancing cost?
Closing costs on a refinance commonly run about 2% to 5% of the loan amount, depending on the lender and your state.
What about a no-closing-cost refinance?
The lender covers the fees in exchange for a higher rate, or rolls them into the loan. It can work if you may move or refinance again soon.
More free tools: see all calculators.