Homes and cars · Calculator

Refinance break-even.
Months to recover your closing costs.

Compare both payment relief and financing cost over the same holding period. A longer term can lower payments while leaving more debt. The payment-only cost-recovery estimate is not a complete refinance decision.

Comparison assumptions

The payment-only closing-cost recovery is a cash-flow estimate. The financing-cost result compares payments made plus remaining principal at the same exit date, with closing costs paid in cash. Payments stop at each loan’s payoff date. It assumes equal starting principal, fixed rates, monthly amortization and no cash out; terms and holding periods use whole months. It excludes escrow, mortgage insurance, taxes, prepayment penalties and the time value of money. Financed fees or a changed loan balance require a separate comparison. Read the Loan Estimate and any changed collateral or borrower protections.[1][2]

The question it answersHow many months until refinancing my mortgage pays for itself?

Rules: United States. Privacy: runs in your browser. What you enter stays on your device unless you copy a share link, which puts your inputs in the link.

US-only. 30-year fixed mortgages that can be paid off early without a penalty are a US product; Denmark is the only other country where they are common. Most countries use different structures.

YOUR CURRENT MORTGAGE
THE NEW LOAN
RESULT
CURRENT P&I PAYMENT
$0/mo
NEW P&I PAYMENT
$0/mo
MONTHLY SAVINGS
$0/mo
BREAK-EVEN POINT
0 months
NET SAVINGS IF YOU STAY 5 YEARS
$0
RECOMMENDATION
Enter your numbers above.

Math on your inputs. A lender’s actual terms, fees and rounding can differ from this result.

What this tool assumes
  • Standard mortgage amortizationamortizationThe process of paying off a loan through regular payments that cover both principal and interest.Full definition formula: P&I = P × r/(1 - (1 + r)^(-n)), where P is principal, r is the monthly rate, and n is the term in months.
  • Closing costs are paid upfront (not rolled into the loan balance). Rolling them in changes the math; this tool does not model that scenario.
  • Break-even = closing costs / monthly savings. Whole months, rounded up.
  • Default current interest rate, 7.79%: the Freddie Mac 30-year fixed average for the week of October 26, 2023 (FRED MORTGAGE30US), the highest weekly rate in the site's mortgage-rate series, which starts in October 2016. A 30-year loan closed that week has about 27 years left in late 2026, the default remaining term. The default new rate, 6.95%, is the same series for the week of September 17, 2026.
  • Financing-cost advantage if you stay = (old-loan payments + old balance at exit) - (new-loan payments + new balance at exit + closing costs).
  • Property tax, insurance, and PMI are not included. Refinancing typically does not affect those, except PMI, which is re-evaluated at the new loan-to-value.
  • Tax effects of mortgage interest deduction (limited by SALTState and local tax (SALT)State and local taxes (income or sales tax, plus property tax) that itemizers can deduct on their federal return, up to a cap: $40,400 for 2026, rising 1% a year through 2029, then back to $10,000 in 2030. In 2026 the cap shrinks toward $10,000 once modified adjusted gross income passes $505,000.Full definition and itemization) are not modeled. After the OBBBA-permanent standard deductionstandard deductionA fixed dollar amount that reduces your taxable income without itemizing. Most people claim this instead of listing individual deductions.Full definition ($16,100 single / $32,200 MFJMarried Filing Jointly (MFJ)A tax filing status where a married couple combines their income and deductions on one tax return. in 2026), most filers do not itemizeitemizeListing specific tax-deductible expenses (charity, mortgage interest, state taxes, big medical bills) on your tax return one by one, instead of taking the flat lump-sum deduction the IRS gives everyone by default. Only worth the paperwork if your list adds up to more than the lump sum. and the deduction does not change effective rate.
Break-even at month 33, $4,870 net at 5 years
Tool defaults: $274/mo savings, 5-year stay
Payment onlycash-flow estimate
Recovering $9,000 costs$274/mo cash flowBreak-even, month 33
Month 0Month 60, exit
Same savings in dollars at month 60
Financing costdebt left counted
$9,000 closing costs$4,870
$0Total payment savings
$9,000 of closing costs, paid in cash$274/mo of payment relief after break-even, cash flow onlyMore debt left at exit on the longer 30-year loan$4,870 net savings if you stay 5 years
The top bar is months. The lower bar is dollars; its red and orange parts do not mark dates.
With the tool's default inputs, a $274/mo lower payment recovers $9,000 of closing costs by month 33. The new 30-year loan also leaves more principal owed at exit, so a 5-year stay nets $4,870, less than the payment savings alone suggest.
HOW THIS IS CALCULATED

This tool runs entirely in your browser: no data is sent to any server. The assumptions and default values behind the result are listed under “What this tool assumes” on this page. Verify the methodology or inspect the source code in your browser's dev tools.

Where to go from here

Read next

Mortgage Math

A 30-year at 7% on $400K costs $558K in interest. The math on 15 vs 30 year, mortgage points, and the break-even period for refinancing your existing mortgage.

Explore further
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Sources

Bracketed numbers and verify badges in the text link to these sources. Figures, rates and rules change: check each source’s date before acting on it.

  1. Consumer Financial Protection Bureau, What is the difference between a mortgage interest rate and an APR? ↩
  2. Consumer Financial Protection Bureau, Loan estimate explainer ↩
  3. Freddie Mac PMMS ↩

Calculators are educational estimates, not financial advice. Disclosures · How pages are reviewed