How to use this calculator
This calculator answers: Does refinancing actually save money after closing costs — and when do I break even?
Why this matters: Closing costs and a reset loan clock can silently eat a lower rate’s savings — the breakeven point is the only number that tells you if it’s worth it.
- Enter your current loan (Current balance ($), Current rate (%), Years remaining) and the refinance offer (New rate (%), New term (years), Closing costs ($), and Years you plan to stay).
- Everything recalculates live as you type — no button needed.
- Read “Your refinance analysis”: it shows two breakevens — “Breakeven — cash flow” (when lower payments recoup the closing costs) and “Breakeven — all-in (equity-adjusted)” (the true cost including the reset loan clock). Try raising closing costs to see both breakevens slide out.
The two loans
Current loan
Refinance offer
How the analysis works
- Payments use the standard amortization formula: P = B × i(1+i)n ÷ ((1+i)n − 1), with monthly compounding.
- Two breakevens. The cash-flow breakeven (closing costs ÷ monthly savings) answers: how many months until the lower payment has recouped the closing costs? The all-in (equity-adjusted) breakeven answers the honest question: in which month is your total position — remaining balance plus everything paid — first better with the refi than without it? It counts the reset loan clock, so it's usually later.
- Cost over your stay simulates both loans month by month for exactly the years you plan to stay: interest paid on each, plus closing costs on the refi side. This is the number that matters — not lifetime interest on a loan you won't keep for its full term.
- The reset-clock trap: refinancing 20 years remaining into a new 30-year loan usually lowers the payment but adds 10 years of interest. If the new term exceeds your remaining years, watch the lifetime comparison closely.
- Assumes closing costs paid in cash (not rolled into the balance), fixed rates, and principal + interest only — no taxes, insurance, HOA, or PMI.
Frequently asked questions
How do I know if refinancing is worth it?
Three numbers decide it: the monthly savings, the two breakeven points, and whether you'll stay past the all-in breakeven. A refi that saves $250/month with $8,000 in costs reaches cash-flow breakeven in 32 months — but the equity-adjusted breakeven, which counts the reset loan clock, usually lands later. Moving before that point doesn't automatically mean lost money, but the refi hasn't earned its keep yet.
What is the breakeven point on a refinance?
There are two. The cash-flow breakeven is closing costs divided by monthly payment savings — the months until the lower payment recoups the refinance cost. The equity-adjusted breakeven is the first month your total position (remaining balance plus everything paid) is better with the refi than without it — it counts the reset loan clock, so judge the decision by this one.
Can refinancing cost more even with a lower rate?
Yes — the classic trap is restarting the clock. Refinancing a loan with 20 years left into a new 30-year loan at a lower rate cuts the payment but can raise lifetime interest, because you're paying for 10 extra years. Compare total interest over your actual stay, not just the payment.
Should closing costs be rolled into the loan?
This calculator assumes you pay them in cash, which is the cheapest option. Rolling costs into the balance means paying interest on them for the life of the loan — convenient, but it raises the true cost of the refinance.
How accurate is the monthly payment math?
It uses the standard fixed-rate amortization formula with monthly compounding, which matches how US mortgages are quoted. Taxes, insurance, HOA, and PMI are not included — compare principal and interest only.
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Last updated: September 27, 2026