Built and fact-checked by the DocNectar team — see our editorial standards
Key Features
Instant Calculation
Get accurate results in real time with our optimized algorithm.
Mobile Friendly
Fully responsive design. Works on all devices & screen sizes.
Privacy Focused
Your data stays on your device. We don't store any inputs.
100% Free
No hidden costs. This tool is completely free forever.
Refinancing can lower your monthly payment, but it's not automatically worth it — closing costs need to be recovered through monthly savings before refinancing actually pays off. Without a break-even calculation, it's easy to refinance too close to when you plan to sell or pay off the loan anyway.
This calculator compares your current loan payment against a new refinanced loan, and calculates how many months it takes to recover any refinance closing costs.
How it works
Enter your current loan balance, rate, and remaining months, along with the new loan's rate and term. The tool calculates both monthly payments, the difference (savings), and — if you provide refinance closing costs — how many months it takes to break even.
- Enter current loan balance.
- Enter current annual interest rate (%).
- Enter months remaining on current loan.
- Enter new annual interest rate (%).
- Enter new loan term (months).
- Enter refinance closing costs (optional).
- Click Calculate to see your results.
Examples
A worthwhile refinance
A $250,000 balance refinanced from 7% (300 months remaining) to 5.5% (360-month new term) saves about $347/month, breaking even on $5,000 in closing costs in about 14.4 months.
Who should use it
- Deciding whether a lower advertised refinance rate is actually worth the closing costs.
- Comparing how extending the loan term affects the refinance decision.
Industry applications
- Mortgage and loan lending
- Personal finance and debt management
Advantages
- Calculates a concrete break-even point on refinance costs, not just a payment comparison.
- Works for any loan type, not just mortgages.
Limitations
- Doesn't account for tax implications or total interest paid over the full loan life.
Common mistakes to avoid
- Focusing only on the lower monthly payment without checking whether it comes from a longer term rather than a genuinely better rate.
- Refinancing without checking whether the break-even period fits how long you actually plan to keep the loan.
Best practices
- Compare total interest paid over the life of both loans, not just the monthly payment difference, to see the full picture.
- Only refinance if you plan to keep the loan longer than the calculated break-even period.
Tips
- If you're unsure how long you'll keep the loan, be conservative — only refinance if the break-even point is comfortably shorter than your expected time horizon, not just barely under it.