What this calculator does
Mortgage refinance breakeven works out how many months of lower payments it takes to recoup the cost of refinancing. Enter your own figures above and the answer updates as you type: nothing is fixed in the code, so the result reflects exactly the numbers you supply.
The formula this calculator evaluates is printed under the tool and explained below, so you can check the working by hand or reuse it in a spreadsheet.
The formula
FormulaOld payment = Balance·i₁/(1−(1+i₁)^−n₁); New payment = Balance·i₂/(1−(1+i₂)^−n₂); Breakeven months = Closing costs / (Old payment − New payment)
The inputs explained
| Field | What to enter |
|---|---|
| Current loan balance ($) | A number, measured in your currency. Starts at 350000. |
| Current interest rate (%) | A number, measured in %. Starts at 7. |
| Years remaining on current loan | A number. Starts at 27. |
| New interest rate (%) | A number, measured in %. Starts at 6. |
| New loan term | A number. Starts at 30. |
| Closing costs to refinance ($) | A number, measured in your currency. Starts at 5000. |
Worked examples
Every figure in the tables below is produced by this page’s own calculator at build time, so the numbers and the tool always agree. Select any row to load that scenario.
How the answer changes with current loan balance
Every other input is held at the calculator’s starting values while current loan balance varies. Select any row to load that scenario into the calculator.
How the answer changes with current loan balance
| Current loan balance ($) | Breakeven period | Monthly saving | Current payment |
|---|---|---|---|
| 175,000 | 32.4 months (2.7 years) | $154.46 | $1,203.68 |
| 262,500 | 21.6 months (1.8 years) | $231.69 | $1,805.51 |
| 350,000 | 16.2 months (1.3 years) | $308.93 | $2,407.35 |
| 525,000 | 10.8 months (0.9 years) | $463.39 | $3,611.03 |
| 700,000 | 8.1 months (0.7 years) | $617.85 | $4,814.70 |
| 1,050,000 | 5.4 months (0.4 years) | $926.78 | $7,222.06 |