How do I calculate my refinance break-even point?
Divide the out-of-pocket cost of the refinance by the monthly payment savings. The result is the number of months it takes to recover what the refinance cost you.
Refinancing · Written by Anil Aggarwal, Realtor® | Mortgage Loan Officer · Updated August 8, 2026
Example: $7,500 in closing costs with $250 per month of savings breaks even in 30 months. Staying past that point is where the savings become real.
If you roll costs into the loan, you are not paying cash at closing, but you are financing the cost and paying interest on it, which shows up in total interest rather than in break-even.
Break-even alone is not the whole answer. Compare interest over a matched horizon so a longer new term does not look better than it is.
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Educational only: The calculators and information on this website are for educational and illustrative purposes only. Results are estimates based on the information and assumptions entered and are not a loan offer, commitment to lend, financial advice or guarantee of eligibility, rates, costs or savings. Actual loan terms, rates, fees, mortgage insurance and qualification requirements vary by borrower, property, lender and loan program. Speak with a licensed mortgage professional for personalized information.