Refinance Calculator
Find the break-even month when monthly refinancing savings recoup your closing costs. Enter values for instant results with step-by-step formulas.
Reviewed by Sahil, Senior Finance & Tax Editor
Reviewed by Sahil, Senior Finance & Tax Editor
Formula
M = P[r(1+r)^n]/[(1+r)^n - 1] | Break-even = Closing Costs / Monthly Savings
Standard amortization formula where P = principal, r = monthly rate (annual/12), n = total months. Break-even point shows when refinancing savings exceed closing costs.
Worked Examples
Example 1: 6.5% to 5.5% refi
Problem:$250,000 balance, 25yr remaining at 6.5%, refi to 5.5% 30yr, $5,000 closing
Solution:Old payment: $1,753. New: $1,419. Savings: $334/mo. Break-even: 15 months.
Result:Save $334/mo, break-even in 15 months
Reviewed by Sahil, Senior Finance & Tax Editor · Editorial policy