Refinance Breakeven Calculator

Enter your current loan balance, current interest rate, new interest rate, and closing costs. The calculator will show your monthly savings and how long it takes to break even on refinancing costs. You can also adjust loan terms and add cash-out amounts.

This calculator provides estimates based on the information you provide. For exact refinancing terms and costs, contact lenders who can provide personalized quotes based on your specific situation, credit score, and property details.

The breakeven point is the number of months it takes for your monthly savings from refinancing to equal the total closing costs. After this point, you start saving money. Generally, refinancing makes sense if you can break even within 24-48 months.

Include all costs associated with refinancing: origination fees, appraisal fees, title insurance, escrow fees, recording fees, and any other lender charges. These typically range from 2-5% of your loan amount.

Refinancing typically makes sense when you can lower your interest rate by at least 0.5-1%, plan to stay in the home long enough to break even, and have good credit. Consider both rate/term refinances and cash-out refinances based on your goals.

Rate/term refinancing changes your interest rate and/or loan term without taking additional cash. Cash-out refinancing allows you to borrow more than your current balance and receive the difference in cash, typically for home improvements or debt consolidation.

Compare your monthly savings to your closing costs. If you can break even within 24-48 months and plan to stay in the home, refinancing is usually worthwhile. Also consider your long-term financial goals and whether the new terms benefit your situation.

Long breakeven periods may not make financial sense unless you have other goals like debt consolidation or home improvements. Consider if the new loan terms provide other benefits beyond monthly savings.

Higher credit scores typically qualify for better interest rates. Scores above 740 generally receive the best rates. Lower scores may still qualify but with higher rates or additional fees.

Yes, you can refinance government-backed loans. FHA offers streamline refinancing with reduced documentation. VA offers IRRRL (Interest Rate Reduction Refinance Loan) for existing VA loans. USDA offers streamline refinancing for existing USDA loans.

Some lenders offer no-closing-cost refinances where they cover the closing costs in exchange for a slightly higher interest rate. This eliminates the breakeven calculation but may cost more over the long term.

Yes, our refinance breakeven calculator is completely free to use. No registration required, no personal information collected, and no hidden fees. You can calculate as many scenarios as you need.

A breakeven period of 10+ years typically indicates refinancing may not be financially beneficial unless you have specific goals like debt consolidation, home improvements, or removing PMI. Consider your long-term plans and alternative options.

Current mortgage rates directly impact your potential savings. When rates drop significantly below your current rate, refinancing becomes more attractive. Monitor rate trends and consider locking in a rate when you find a good deal.

If you plan to move within 2-3 years, refinancing may not make sense unless you can break even quickly. Consider the costs of starting over with a new loan term versus staying with your current mortgage.

FHA streamline refinancing requires minimal documentation and no appraisal, making it faster and cheaper than regular refinancing. It's only available to existing FHA borrowers and typically offers better rates than conventional refinancing.

Yes, if your home value has increased and you now have 20% equity, refinancing can remove PMI. However, consider if the closing costs outweigh the PMI savings, especially if you're close to naturally reaching 20% equity.

Cash-out refinancing typically has higher closing costs and may result in a higher interest rate. The breakeven calculation becomes more complex since you're also accessing equity. Consider the cost of the cash versus other borrowing options.

Prepayment penalties can significantly impact your breakeven calculation. Include the penalty amount in your closing costs to get an accurate breakeven timeline. Some penalties decrease over time, so timing may matter.