Loan basics
Refinance break-even point
Definition
The refinance break-even point is the number of months until the monthly savings from a new loan repay the cost of refinancing. Divide total closing costs by the monthly payment saving: $4,800 in costs saving $200 a month breaks even in 24 months. Refinancing pays off if you keep the loan longer than that.
Refinance break-even point, explained
A fuller analysis also compares total interest over the period you expect to keep the loan.
See refinance break-even point in a calculator
The Refinance Calculator shows how this works with real numbers. Compare your current mortgage to a refinance offer and find your break-even.
Open the Refinance CalculatorFAQ
Refinance break-even point: quick questions
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Q.01What is refinance break-even point?
The refinance break-even point is the number of months until the monthly savings from a new loan repay the cost of refinancing. Divide total closing costs by the monthly payment saving: $4,800 in costs saving $200 a month breaks even in 24 months. Refinancing pays off if you keep the loan longer than that.
Q.02What is a good refinance break-even?
Any break-even comfortably shorter than the time you expect to keep the loan; many borrowers look for under three years.
Explain it with their numbers
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