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Break-even on a refinance

Mortgage Refinance Calculator

Compare the mortgage you have with one you could replace it with: the new payment, how many months of savings it takes to cover closing costs, and whether a lower payment costs more interest overall.

Your numbers

Refinancing this mortgage

What the new payment would be, how long it takes to earn back the closing costs, and what the whole thing costs in interest.
FREDDIE MAC PMMS

30-year 6.71% · 15-year 6.04%National weekly average · survey week of Sep 3, 2026 · A newer release is expected. Check Freddie Mac for the latest week before relying on it.

Loan you have

$What you owe now, not what you borrowed
%
years
monthsUsed to work out the payment you are on now

Loan you would take

%Starts at the dated national average above. Use your quote if you have one.
yearsGoing back to 30 years lowers the payment and usually raises total interest
Closing costs

What the refinance itself costs up front. This is the figure the break-even point is measured against.

$Lender fees, title, appraisal, recording

Months to earn back the closing costs

24 monthsSaving $216.90 a month against $5,000 of closing costs
WORTH KNOWING

Lower payment, more interest overallThe payment drops by $216.90, but restarting the term means paying $2,161 more interest across the life of the loan. Both can be true at once.

Payment now$2,090.13324 payments left
Payment after$1,873.23360 payments on the new loan
Monthly saving$216.90
Cash at closing$5,000Paid up front
New loan amount$290,000Balance only
Extra interest over the life$2,161Including closing costs
How we got this
  1. Payment you have now7.5% with 324 payments left$2,090.13
  2. Payment after refinancing$290,000 at 6.71% over 30 years$1,873.23
  3. Monthly saving$5,000 paid at closing$216.90
  4. Break-evenMonths of lower payments needed to cover the closing costs24 months
  5. Extra interest over the lifeRemaining interest on the loan you have, against interest plus closing costs on the new one$2,161
What we assumed
  • Both loans are fixed-rate and are compared on principal and interest only. Property tax, insurance, HOA, and PMI are unchanged by refinancing and are left out.
  • Break-even is closing costs divided by the monthly saving. It ignores what that money could have earned elsewhere, and assumes you keep the loan that long.
  • Closing costs are paid up front and are not added to the new balance.
  • The lifetime comparison assumes both loans run to the end of their terms. Selling, moving, or refinancing again changes it.
  • A refinance that lowers the payment by stretching the term can still cost more in total interest. Both figures are shown so the trade is visible.
  • This is not a loan estimate. Rate, costs, and eligibility come from a lender.
Technical details

Method refinance-v1.0.0Data Manual inputs / fixed rules

Guide

When a refinance saves money on this page

CostAnswer editorialIndependent calculator publisher

The calculator compares the mortgage you have with a replacement loan: the new payment, months of payment savings to cover closing costs, and whether a lower payment still costs more interest overall.

Break-even is not the whole story

If the new payment is $200 lower and closing costs are $6,000, a simple break-even is 30 months. If you sell in year two, you did not recoup the costs. If the new loan is longer than the remaining term, total interest can rise even when the payment falls.

The page uses amortizing math on both loans. It does not price points, cash-out tax treatment, or a change from ARM to fixed beyond the rates you type.

A lower payment that resets the clock

Type the remaining balance and remaining term on the loan you have, not the original 30-year note. A refinance that starts a new 30-year term can cut the monthly figure and still increase total interest. The break-even line is closing costs divided by monthly savings. It does not know when you will sell.

Cash-out, points, and ARM-to-fixed conversions are only in the rates and costs you enter. The page does not look up today’s market quotes or a county’s FHA limit.

Questions about this calculator

How do I know if refinancing is worth it?

Look at break-even months and total interest, not only the new payment. If you will not keep the loan past break-even, the refinance is a cost. This is still not advice for your loan.

Should I refinance to a 15-year loan?

A shorter term usually raises the payment and cuts interest. Run both terms with the same closing costs. The “better” choice depends on cash flow, not on this page’s headline.

Terms used here

Break-even
Closing costs divided by monthly payment savings. Ignores how long you keep the loan if you stop there.
Closing costs
Fees to originate the new loan. Type the quote, not a national average.
Cash-out refinance
Replacing a loan and taking cash from equity. Tax and PMI effects are not fully modeled.

Practical tips

  • Use remaining term and remaining balance on the current loan, not the original 30-year numbers.
  • If the new term resets to 30 years, check total interest before you celebrate the payment.

Limits and caveats

  • Not a lender comparison and not financial advice.
  • Prepayment penalties, discount points, and ARM margins are only in the numbers you type.

Results are for information. They are not legal, tax, medical, or financial advice. How the math is maintained · Report a wrong figure.

Engine notes

Rounding, versioning, and omissions that sit beside the guide rather than repeating it.

  • The payment you are on now. You know your balance, not what you originally borrowed, so the current payment is reconstructed from the balance, the rate, the original term, and how many payments you have made. That is the payment the new one is compared against.
  • Break-even. Closing costs divided by the monthly saving, rounded up to whole months. Rolling the costs into the loan does not avoid them, so break-even still counts the full amount. If the new payment is not lower, there is no break-even and the page says so.
  • The trade the payment hides. Restarting a 30-year term lowers the payment even at a similar rate, while adding years of interest. Remaining interest on your current loan is compared with interest plus closing costs on the new one, so a lower payment that costs more overall is visible instead of buried.

Calculation receipt

What each number here is

The arithmetic is decided by your inputs. Official data only supplies a starting value, and anything you type replaces it.

OBSERVEDFreddie Mac PMMS
Only a starting value. A figure from your own bill or quote replaces it and is used instead.
USER ENTEREDA figure you enter
A figure you typed. It replaces our default and is used exactly as given.

Sources

Where this data comes from

Freddie MacSource: Freddie Mac Primary Mortgage Market Survey (PMMS), national weekly averages for 30-year and 15-year fixed-rate mortgages. Snapshot freddie-mac-pmms-2026-09-03-v1.Freddie Mac · Sep 3, 2026 ↗

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