Free calculator
Refinance break-even calculator
A refinance costs money up front and saves money every month. This shows the month the savings catch up with the closing costs, and what happens to your total interest if you take a shorter term or cash out equity.
Verdict
Refinancing pays off after 31 months (2 years, 7 months) if you stay that long. It lowers your payment by $205 a month.
Break-even month: 31 ($6,250 costs ÷ $205 a month saved)
Current loan vs. new loan
| Current | New | |
|---|---|---|
| Loan balance | $250,000 | $250,000 |
| Monthly payment (principal and interest) | $1,936 | $1,731 |
| Interest paid to the end of the loan | $400,415 | $373,142 |
- Monthly savings
- $205
- Total interest saved
- $27,273
- Closing costs
- $6,250
Assumptions
Every default in this calculator, so you can see exactly what the numbers rest on. Change any input to match your own situation.
- The new rate defaults to the current published Freddie Mac 30-year average. Your own rate quote will differ with credit, loan size and loan type.
- Refinance closing costs default to 2.5% of the new loan (a typical range is 2% to 5%). Type your lender’s estimate if you have one.
- Closing costs are paid in cash at closing, not rolled into the loan. Rolling them in raises your balance and your payment.
- Payments are principal and interest only. Taxes, insurance and mortgage insurance are not included and are assumed unchanged.
- Break-even = closing costs divided by the monthly payment savings, rounded up to a whole month.
- Total interest compares the interest left on your current loan with the interest on the new loan, each paid to the end of its own term.
- A cash-out amount is added to the new loan balance. Cash you take out is not counted as savings.
These figures are estimates for planning only. They are not a loan offer, a Loan Estimate, or a commitment to lend, and your actual costs, rate and payment will differ. Ask a lender for a Loan Estimate for exact numbers.
Want real numbers for your situation?
Talk to an agent about your plans, or get pre-approved with a local loan officer.