Free tool
Refinance break-even calculator: is it worth it?
Enter your current payment, the rate you were quoted for the refinance, and the costs. See monthly savings and how long it takes to break even.
Everything runs in your browser. Nothing you type is sent anywhere or saved. Want me to check real numbers? Send me your Loan Estimate.
What is a refinance break-even point?
Your break-even point is how many months it takes for monthly savings to repay what the refinance cost. Divide total costs by the monthly savings. If you plan to keep the loan longer than that, the refinance likely pays off. If you might sell or refinance again sooner, it may not.
What costs should I include?
Use the loan costs and government fees from the new Loan Estimate, mainly Sections D and E. Prepaids and the new escrow deposit in Sections F and G aren't really costs of the refinance, because you'd pay taxes and insurance anyway, and your old escrow balance is usually refunded.
Watch out for term resets
Lowering your payment by restarting a 30-year clock isn't the same as saving money. Compare total interest over the time you'll keep the loan, not just the monthly payment. Page 3 of the Loan Estimate, In 5 Years, is a good side-by-side check.
For illustration only. Not a commitment to lend, a Loan Estimate, or an offer of credit. Your actual figures depend on your full application, credit approval, property, and the loan program. John Stafford NMLS #2470539 | GoRascalJohn powered by GoRascal Inc. NMLS #2072896. Equal Housing Opportunity.
Common questions
Is it worth refinancing for a small rate drop?
It depends on costs and how long you'll keep the loan. The break-even months answer that directly.
Should I roll closing costs into the loan?
Rolling costs in means less cash now but a bigger balance and more interest. Try both ways in the calculator.
Can I refinance a Texas cash-out loan?
Yes, subject to Texas rules. See the Texas cash-out page for the once-a-year rule and Section 50(f)(2).
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