Mortgage Refinance Break-Even Calculator
Compare your remaining mortgage with a proposed refinance, estimate monthly savings, total interest, refinancing cost, and the month when cumulative payment savings recover the upfront cost.
Loan assumptions
Current mortgage
Mortgage refinancing
Refinance results
Payment summary
| Metric | Current loan | New loan | Difference |
|---|---|---|---|
| Principal | $270,210.89 | $272,710.89 | $2,500.00 |
| Monthly payment | $1,347.13 | $1,223.43 | -$123.71 |
| Interest rate | 3.50% | 2.50% | -1.00 pp |
| Term | 25.17 years | 25.00 years | -0.17 years |
| Total interest | $136,623.60 | $94,317.12 | -$42,306.49 |
| Total payments | $406,834.49 | $371,255.11 | -$35,579.38 |
How to use the mortgage refinance break-even calculator
What this calculator does
This calculator estimates whether a proposed mortgage refinance may improve your cash flow and how long it could take for lower monthly payments to recover the upfront refinancing cost. It compares the remaining amortization of your current mortgage with a new fixed-payment loan, reports monthly payment and lifetime-interest differences, and estimates a break-even month and calendar date. It is a planning model, not a loan approval, rate quote, tax opinion, appraisal, or recommendation to refinance.
When to use it
Use it when a lender offers a lower rate, when you are considering a shorter or longer term, when points are offered in exchange for a rate reduction, or when you want to test whether you expect to keep the property long enough to recover closing costs. The Consumer Financial Protection Bureau explains that borrowers should compare the interest rate, loan term, points, lender credits, and total closing costs rather than judging a refinance by the monthly payment alone in its guidance on mortgage refinancing.
How to calculate
- The calculator opens with a complete demonstration scenario and a ready-to-download example workbook. Replace each sample value with figures from your latest mortgage statement and refinance Loan Estimate.
- Enter the current principal, remaining term, rate, and next payment date. Then enter the new term, new rate, mortgage points, other costs, any cash in or out, and the new first-payment date.
- Read the break-even point first, then compare monthly savings with total-interest and total-payment savings. A lower payment can come from a longer term and may not reduce total cost.
- Select Download Excel to export the current validated assumptions and results. Reset clears the demonstration and all results; Excel export remains unavailable until every required field contains a complete valid scenario again.
Input guide
Current principal balance is required currency and should be the unpaid principal, such as $270,210.89, not the original purchase price or escrow balance. A higher balance increases both loan payments and the dollar cost of percentage-based points. Remaining mortgage term is required in years, may include decimals, and must be greater than zero; 25.1667 years represents about 302 months. Do not enter the original term if several years have already passed. Current interest rate is the annual percentage rate used for the payment calculation, such as 3.5%; enter the note rate, not a payment amount.
Next current-loan payment date is a required calendar date used only to align the break-even date. New loan term is the refinance amortization in years; a longer term normally lowers the payment but can increase lifetime interest. New interest rate is required as an annual percentage, such as 2.5%. The model assumes monthly compounding and a level-payment fixed-rate loan. Mortgage points are required as a percentage of the new principal; one point equals 1% of the loan amount. Enter 0 when no points are charged. Other refinancing costs are required dollars for lender, title, appraisal, legal, recording, and similar charges. Cash in / out accepts positive or negative currency: positive values increase the new principal as cash-out, while negative values reduce it as cash paid in. New loan first payment date anchors the projected break-even date.
Output guide
Break-even point is the first whole month when accumulated monthly payment savings equal or exceed points plus other refinancing costs. If monthly savings are zero or negative, no payment-based break-even exists. Current monthly payment and New monthly payment are estimated principal-and-interest payments only. Monthly payment savings equals new payment minus current payment shown as savings when positive. Total refinancing cost combines points and other costs. Estimated interest savings compares remaining lifetime interest, while Estimated total-payment savings compares scheduled payments and includes the cash-out principal difference. In the Payment summary table, Principal, Monthly payment, Interest rate, Term, Total interest, and Total payments appear for both loans with a new-minus-current difference.
Worked example
With a $270,210.89 current balance, 25.1667 years remaining, and a 3.50% rate, the estimated payment is $1,347.13. Refinancing into a 25-year loan at 2.50% with $2,500 cash-out creates a $272,710.89 new principal and an estimated $1,223.43 payment. Points of about 0.6333% equal $1,727.11; adding $2,500 of other costs produces $4,227.11 of upfront cost. Monthly savings of about $123.70 recover that cost in roughly 35 months, subject to rounding and the exact point amount. The calculator's live values and workbook use full-precision calculations.
Learn more and interpret the result carefully
The CFPB loan-options guidance explains how loan terms affect payment and cost. The Federal Reserve's consumer guide to mortgages and refinancing decisions provides additional context, and the FDIC's overview of mortgage costs and borrower considerations can help you prepare questions for lenders. Compare multiple written Loan Estimates and consider how long you realistically expect to keep the property.