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Mortgage Refinance Break-Even Calculator

Is the practice earning what it should for the hours it spends?

Monthly payment savings, months to recover closing costs and total interest over the old and new loans.

  • Runs in your browser
  • Nothing stored or sent
  • Free, no sign-up
Your figures
Example figuresIllustrative only. Type over them with your own.
Months to break even
24.98
Closing costs divided by monthly savings
Current monthly payment
$2,039
New monthly payment
$1,799
Drawn to one scale
Current monthly payment$2,039
New monthly payment$1,799
Monthly savings$240
Interest over the rest of the current loan$385,045
Interest over the new loan$347,515
Costs paid at closing$6,000
All results
MeasureResult
Months to break even24.98
Current monthly payment$2,039
New monthly payment$1,799
Monthly savings$240
Interest over the rest of the current loan$385,045
Interest over the new loan$347,515
Costs paid at closing$6,000
How this was worked out
Work shownrecomputed as you type
Payment = L x r / (1 - (1 + r)^-n) for the old and the new loan
Break-even months = costs paid at closing / (old payment - new payment)

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Payment = L x r / (1 - (1 + r)^-n) for the old and the new loan
  • Break-even months = costs paid at closing / (old payment - new payment)

How it works

A refinance is worth it only if you keep the loan long enough for the monthly savings to repay the closing costs. Divide costs by the monthly saving to find that month.

A longer new term lowers the payment but can raise total interest, so compare the two interest rows as well. When costs are rolled into the loan, nothing is paid at closing and the savings begin immediately, but the loan is larger. Taxes and the time value of money are not included.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

What if savings are negative?

Then the new payment is higher and there is no break-even.

Should I count escrow?

No. Taxes and insurance are the same either way. Enter the loan balance only.

What about points?

Include points in the closing costs.

Formulas on this page are the standard definitions.

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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