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Refinance break-even calculator

Estimate how many months of payment reduction recover refinance closing costs, then compare interest plus costs over a holding period using separate current and proposed loan terms.
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The short answer
How it works
4
Make the result useful
Questions landlords ask
4
Keep exploring
3
Keep exploring
Amortization schedule calculator
Mortgage calculator
Loan-to-value (LTV) calculator
Refinance break-even calculator
Buy & finance
Last updated: July 2026
1. Choose an input mode: enter both quoted monthly P&I payments directly, or enter the balance, both rates, current remaining term, and proposed term.
How it works
2. Enter the total closing costs — lender fees, title, appraisal, and any points you pay to close the new loan.
How it works
3. The simple screen divides closing costs by the monthly payment reduction. In rate mode, choose a holding period to compare current-loan interest with new-loan interest plus costs.
How it works
4. Review both outputs with lender disclosures, remaining balances, prepayment terms, escrow treatment, and your realistic sale or refinance timing.
How it works
5. Can a refinance with a lower payment still cost me more?
Questions landlords ask
6. What counts as closing costs?
Questions landlords ask
7. What does the "from rates" mode assume?
Questions landlords ask
Refinance break-even calculator
Category
Buy & finance
Last updated
July 2026
The assumptions that move this result
Current payment
Comparable existing payment.
New payment
Proposed refinance payment.
Costs
Lender, title, and other refinance costs.
Term
New amortization term that affects total interest.
The short answer
1. Choose an input mode: enter both quoted monthly P&I payments directly, or enter the balance, both rates, current remaining term, and proposed term.
A simple refinance break-even divides closing costs by the monthly payment reduction. If costs are $6,000 and payment falls $200, the screen returns 30 months. That is not a complete savings verdict: compare interest plus costs over the expected holding period, because a longer new term can lower payment while slowing principal paydown.
The short answer
Last updated: July 2026
A simple refinance break-even divides closing costs by the monthly payment reduction. If costs are $6,000 and payment falls $200, the screen returns 30 months. That is not a complete savings verdict: compare interest plus costs over the expected holding period, because a longer new term can lower payment while slowing principal paydown.
Primary references on this page:
CFPB: Should I refinance?
After the estimate:
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Refinance break-even calculator
When do payment savings recover refinance costs?
Estimate the simple payment break-even, then compare interest plus closing costs over a holding period. Enter quoted payments directly, or model the current and proposed loans with separate terms.
How do you want to enter it?
Enter payments
From rates
Current monthly P&I payment
$
New monthly P&I payment
$
Closing costs
$
Lender fees, title, appraisal, and any points — everything you pay to close the new loan.
Input-driven result
Your inputs
Formula
Result below
Simple payment break-even
2 yr 6 mo
$6,000 closing costs ÷ $200/mo payment reduction. This screen does not include the different principal paths.
Monthly payment change
$200
$2,100/mo now vs $1,900/mo after the refi.
Estimate based on your inputs. Not a promise of results.
Estimate only. The simple break-even divides transaction costs by payment reduction. In rate mode, the second comparison uses separate current and new amortization terms, counts interest rather than principal as financing cost, and stops at the shorter of the selected horizon or either loan term. It excludes taxes, insurance, prepayment terms, tax effects, and opportunity cost. Verify lender disclosures before deciding.
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Watch it work
How it works

How this tool works.

A refinance exchanges transaction costs today for different debt terms going forward. The holding period matters, but payment reduction alone can mislead when the proposed loan restarts amortization over a longer term. A lower required payment is a cash-flow change; it is not automatically an equal reduction in financing cost.
Enter quoted principal-and-interest payments for a quick screen, or model the current balance, both rates, the current remaining term, the proposed term, closing costs, and a comparison horizon. Rate mode calculates the simple payment break-even and also compares interest plus closing costs over the shorter of that horizon or either loan term. It remains an estimate, not a lender quote or recommendation.
1
Choose an input mode: enter both quoted monthly P&I payments directly, or enter the balance, both rates, current remaining term, and proposed term.
2
Enter the total closing costs — lender fees, title, appraisal, and any points you pay to close the new loan.
3
The simple screen divides closing costs by the monthly payment reduction. In rate mode, choose a holding period to compare current-loan interest with new-loan interest plus costs.
4
Review both outputs with lender disclosures, remaining balances, prepayment terms, escrow treatment, and your realistic sale or refinance timing.
Make the result useful

Refinance break-even decisions

Existing payment is the comparable current principal-and-interest payment.
New payment must use the proposed loan terms and term length.
Closing costs are cash or financed costs needed to complete refinance.
Holding period determines whether simple break-even is relevant.

The assumptions that move this result

Current payment
Comparable existing payment.
New payment
Proposed refinance payment.
Costs
Lender, title, and other refinance costs.
Term
New amortization term that affects total interest.

Calculation lens

break-even months = refinance costs ÷ monthly payment reduction
Use the output as a documented scenario result, not a guarantee.

Read the number in context

Worked scenario
Scenario: $6,000 costs ÷ $200 savings = 30 months.
Edge case
Edge case: a lower payment from restarting a 30-year term can increase total interest.
Does not guarantee rate, approval, future occupancy, or loan costs.
Worked formula
break-even months = refinance costs ÷ monthly payment reduction
Questions landlords ask

Questions about this tool and its limits.

Can a refinance with a lower payment still cost me more?

Yes — and this is the trap the break-even number alone does not catch. If you are 8 years into a 30-year loan and refinance into a fresh 30-year term, you stretch the remaining balance over more years. The payment drops, but you can pay more total interest over the life of the loan. Compare lifetime interest on both loans, not just the monthly payment.

What counts as closing costs?

Everything you pay to close the new loan: origination and lender fees, appraisal, title and recording, and any discount points. If costs are rolled into the loan balance instead of paid in cash, you are financing them — the break-even math still applies, but the savings are also slightly smaller because the balance is larger.

What does the "from rates" mode assume?

It treats both loans as fully amortizing at the balance, rates, and separate terms you enter. The interest comparison stops at the shorter of your selected horizon or either loan term. It excludes escrow, taxes, insurance, prepayment terms, opportunity cost, and tax effects, so use actual lender disclosures for a real decision.

Is this a recommendation to refinance?

No. It is arithmetic on the numbers you enter — an estimate, not lending or financial advice. Rates, fees, and your plans for the property all matter, and a lender or advisor can run the full comparison including total interest, points, and how long you realistically expect to hold the loan.

Before you act

Compare total interest and term.
Confirm closing estimate.
Compare holding period with break-even.
Mortgage refinance definition →
Refinance break-even point →
Rate-and-term refinance →
Cash-out refinance →
Editorial ownership
Written and maintained by the Aptoria editorial team
Editorial method reviewed July 28, 2026. Aptoria reviews scope, source fit, examples, limitations, links, and publication gates. This record does not claim attorney, CPA, lender, appraiser, or other independent professional sign-off.
Professional review is not claimed. Verify current law, tax treatment, loan terms, valuation inputs, and property-specific facts with the appropriate qualified professional before acting.
How Aptoria researches and reviewsReport a correction
Primary and authoritative sources
CFPB: Should I refinance? ↗
The need to compare closing costs, payment changes, loan term, and total cost when evaluating a refinance.
Built by a landlord who's done every one of these jobs by hand.
Aptoria was built by an owner-operator managing a Brooklyn portfolio — the 11pm calls, the awkward rent texts, the April receipt-pile — not by a software team guessing at the problem.
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