Result
27.8 months to break even
Estimated refinance break-even is about 27.8 months to break even.
- New principal and interest payment
- 1,663.18 $
- Monthly payment savings
- 186.82 $
Estimate only. Not financial advice, loan approval, or a quote. Confirm rates, taxes, insurance, lender terms, and fees before making decisions. Read the full disclaimer.
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At a glance
- Cost
- Free
- Login
- Not required
- Best use
- Estimate refinance savings and break-even timing from current payment, new loan amount, new rate, term, and closing costs.
- Output
- Browser result with print and PDF options
- Reviewed
- 2026-08-29
Result summary
Quick answer
With the sample inputs, this calculator returns 27.8 months to break even. New principal and interest payment: 1,663.18 $. Estimate the new principal-and-interest payment, subtract it from the comparable current payment, and divide closing costs by monthly savings.
Publisher Published by EverydayCalc Editorial Editorial standards and limitations
Each calculator shows its formula and defines the inputs. Worked examples make the math checkable. The page also names the limits that can change the result.
Last calculation review:
Instructions
How to use this calculator
Open the short walkthrough for choosing and checking inputs.
The calculator estimates the new amortized principal and interest payment, compares it with your current payment, and divides closing costs by monthly savings.
Page guide
On this page
Jump directly to the part of the calculator you need.
Calculation details
Formula and methodology
See the exact math used to produce the result.
New payment uses the fixed-rate amortization formula. Monthly savings = current comparable principal-and-interest payment minus new payment. Break-even months = closing costs divided by positive monthly savings.
Before acting
Assumptions to check
Review the real-world details that can change the estimate.
Compare principal and interest on both sides. The result does not automatically include points, financed fees, escrow, taxes, insurance, PMI, prepayment effects, a reset loan term, or how long the home will be kept.
More guidance Examples, methodology, and planning checks Open the worked example, review notes, reference tables, and practical next checks.
What to verify before acting
Compare break-even time with the expected time in the home and review total interest, APR, cash due, loan balance, and term reset in an actual Loan Estimate.
When to use this calculator
- Screening a refinance quote before deeper comparison
- Testing closing-cost and rate scenarios
- Comparing break-even time with an expected move date
Tips for better estimates
- Use comparable principal-and-interest payments on both sides.
- Review APR and total interest in addition to the monthly payment.
- Rerun the estimate when the loan amount, points, fees, or term changes.
How this calculator is reviewed
This page is checked for inputs, formulas, examples, assumptions, topic fit, and related links. For this calculator, the review also covers balance, APR, payment amount, compounding, fees, taxes, payment timing, and estimate limits.
The sample result is covered by automated tests, and the page links to related calculators and, where available, supporting guides so readers can check the assumptions before acting. If a formula, label, or assumption looks off, send the page URL and your inputs through the contact page.
Worked example
Example inputs: Current principal and interest payment: $1850; New loan amount: $285000; New interest rate: 5.75 %; New loan term: 30 years; Closing costs: $5200. With those values, the calculator returns 27.8 months to break even. Estimated refinance break-even is about 27.8 months to break even.
Example scenarios
- Use a current principal-and-interest payment rather than an escrow-inclusive total.
- Include all closing costs that must be recovered through savings.
- Compare both the payment change and the new payoff timeline.
Quick reference chart
| Sample result | 27.8 months to break even |
|---|---|
| New principal and interest payment | 1,663.18 $ |
| Monthly payment savings | 186.82 $ |
| Best next step | Compare break-even time with the expected time in the home and review total interest, APR, cash due, loan balance, and term reset in an actual Loan Estimate. |
FAQs
Mortgage Refinance Calculator questions
What does refinance break-even mean?
It is the modeled number of months of payment savings needed to recover the entered closing costs. It does not measure every cost or benefit of the new loan.
Should my current payment include taxes and insurance?
Use the comparable principal-and-interest portion unless the new-payment side includes the same escrow items. Mixing scopes distorts monthly savings.
Does a lower payment always mean the refinance saves money?
No. A longer term, larger balance, fees, points, or staying past a different time horizon can increase total cost despite a lower payment.
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Common planning mistakes
Comparing an escrow-inclusive current payment with principal and interest only, ignoring a term reset, omitting financed fees, or treating break-even as loan approval or guaranteed savings.
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