Calculate your mortgage refinance break-even point and total savings. See exactly how many months until refinancing pays off and your lifetime interest savings.
Break-even point & total lifetime savings
The mortgage refinance calculator answers the most important question about refinancing: how long until it pays off? If your closing costs are $6,000 and your monthly savings are $200, the break-even point is 30 months — you need to stay in the home at least that long for refinancing to make financial sense. This refinance break-even calculation is the single most useful piece of analysis before you commit to new loan terms and signing fees. In 2025, US mortgage refinance closing costs typically ran $3,000–$8,000 depending on loan size, location, and lender.
The old rule of thumb — refinance whenever you can drop your rate by 1% — is useful but incomplete. A 1% drop on a $300,000 balance saves roughly $165/month, recovering $5,000 in closing costs in about 30 months. But a 0.75% drop on a $500,000 loan saves over $200/month and recovers costs even faster. The calculation is always: monthly savings divided by closing costs equals break-even months. If you plan to move or sell in three years, a 36-month break-even isn't worth it. If you're staying 10+ years, even a smaller rate reduction pays off handsomely in lifetime interest savings.
Divide your total closing costs by your monthly payment savings. If closing costs are $5,400 and you save $180/month, your break-even is 30 months. Moving before that date means you lost money on the refinance.
Typical refinance closing costs include appraisal ($300–$600), origination fees (0.5%–1% of loan), title insurance, and government recording fees. No-closing-cost refinances roll fees into the rate, which is sometimes worth it.
A 1% rate drop on a $300,000 loan saves about $165–$180/month. On a $500,000 loan, the same rate drop saves $275–$300/month and recovers closing costs significantly faster. Larger loans benefit more from rate reductions.
Rate-and-term refinances lower your payment or shorten your term. Cash-out refinances let you access home equity but increase your loan balance. Be cautious about cash-out — you're converting equity into debt with your home as collateral.