Refinance Break-Even Calculator

The break-even point is the number of months it takes for your cumulative monthly savings to equal your closing costs. If you plan to stay in the home longer than the break-even period, refinancing is financially worthwhile.

Most financial advisors suggest a break-even period under 3 years (36 months) is excellent, under 5 years is good, and up to 7 years may be acceptable depending on your plans. Beyond 7 years, refinancing is generally not advisable unless you are certain you will stay that long.

Refinancing typically costs 2-5% of the loan balance. On a $300,000 loan, expect $6,000-$15,000 in closing costs. Costs include origination fees, appraisal, title insurance, and settlement charges. Some lenders offer no-closing-cost refinances at a higher rate.

It depends on how long you will stay. A no-closing-cost refinance rolls fees into a slightly higher rate, so you save immediately but pay more each month versus a traditional refinance. If you plan to move or refinance again in a few years, no-closing-cost may be better.

Refinancing from 30 to 15 years increases monthly payments but drastically reduces total interest paid. Use this calculator with your actual payment difference. The higher payment commitment suits borrowers with stable income who want to build equity faster and minimize interest.

Consider remaining loan term (extending it resets amortization), equity impact, tax deduction changes on mortgage interest, and opportunity cost of closing costs. If you have 10 years left on a 30-year loan, refinancing into another 30-year adds 20 years of payments.