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Refinance Break-even Calculator

Compare your current mortgage to a refinance scenario. See your monthly savings, total interest saved, and the exact month closing costs are recouped.

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Refinance Break-even Calculator
Compare your current mortgage to a refinance scenario. See monthly savings, lifetime interest savings, and the exact month closing costs are recouped.

$350,000

3.00% of loan (≈ $10,500)

7.500% APR

27 years left

6.360% APR

Default 6.36%Freddie Mac PMMS — 30-Year Fixed Rate Mortgage Averageas of May 2026

30-year fixed

Break-even point

2.6 years (31 mo)

Current payment

$2,522.57

New payment

$2,180.11

Monthly savings

$342.46

Lifetime interest Δ

$21,972

Watch the term reset: If your current loan has 27 years left and you refinance into a fresh 30-year, you may lower the monthly payment but pay more total interest. The "lifetime interest Δ" line shows net change including closing costs.
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Refinance Break-even
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⏱ 2.6 years

Refinancing $350,000 from 7.500% to 6.360%, with $10,500 closing costs.

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The Refinance Break-even Calculator compares your current mortgage to a refinance scenario and shows the exact month cumulative monthly savings recoup your closing costs. Closing costs typically run 2–5% of the loan amount per Freddie Mac — the calculator defaults to 3% as a midpoint. If you'll sell before break-even, refinancing doesn't pay; if you'll stay longer, it usually does.

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How this calculator works

  1. Enter your CURRENT outstanding loan balance (not the original amount).
  2. Enter your current interest rate and the years remaining on the loan.
  3. Enter the NEW rate quote from your lender and the new term.
  4. Set closing costs as a % of loan (3% default — verify against your lender's Loan Estimate document).
  5. Read break-even months and lifetime interest change. The lifetime number SUBTRACTS closing costs from interest savings — a positive number means the refi pays out net.

monthly_savings = M_current − M_new break_even_months = closing_costs / monthly_savings

Two simple ratios. Monthly savings is the difference between your current and new mortgage payments. Break-even is closing costs divided by those monthly savings. If monthly savings ≤ 0, refinancing doesn't pay at these inputs, full stop.

M_current
Current monthly principal + interest payment
M_new
New monthly P+I after refinancing
closing_costs
All-in refinance closing costs (typically 2–5% of loan)

Frequently asked questions

Most homeowners need 2-5 years to recoup typical closing costs (2-5% of loan amount). If you plan to move sooner, refinancing usually doesn't pay off unless rates have dropped substantially.

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Sources
Every default value is sourced. Verify anything.
National Avg Savings APY — 0.38% (as of May 2026)FDIC National Rates and Rate Caps High-Yield Savings (typical) — 4% (as of May 2026)FDIC National Rates + reported HYSA APY (top online banks) S&P 500 — 10% (as of 2026 (1928–2025 dataset))NYU Stern (Damodaran) — S&P 500 Annual Returns 1928–2025 Total US Stock Market — 9.7% (as of 2026)CRSP US Total Market Index (long-run avg) 10-Year Treasuries — 4.5% (as of May 2026)Federal Reserve FRED — 10-Year Treasury (DGS10) US Real Estate — 4.2% (as of 2026)S&P CoreLogic Case-Shiller US National Home Price Index (FRED) Gold — 7.8% (as of 2026)World Gold Council historical price data Long-run CPI Inflation — 3% (as of 2026)Bureau of Labor Statistics — CPI-U (long-run avg) 30-Year Fixed Mortgage — 6.36% (as of May 2026)Freddie Mac PMMS — 30-Year Fixed Rate Mortgage Average Credit Card APR (avg, accounts assessed interest) — 21.52% (as of May 2026 release (March 2026 data))Federal Reserve G.19 — Consumer Credit Auto Loan (60-month new car, avg) — 7.52% (as of May 2026 release (March 2026 data))Federal Reserve G.19 — Consumer Credit Personal Loan (24-month unsecured, avg) — 11.4% (as of May 2026 release (March 2026 data))Federal Reserve G.19 — Consumer Credit Federal Direct Subsidized/Unsubsidized (Undergrad) — 6.52% (as of AY 2026-27)US Dept of Education — Interest Rates and Fees for Federal Student Loans HELOC (typical introductory rate) — 7.26% (as of May 2026)Bankrate — Current HELOC Rates 12-month CD (top online rate, typical) — 4.1% (as of May 2026)FDIC + reported top online CD rates Mortgage Refinance Closing Costs (typical) — 3% (as of 2026)Freddie Mac — Cost of Refinancing College Tuition Inflation (long-run avg) — 4% (as of AY 2025-26 (Nov 2025 publication))College Board — Trends in College Pricing 2025