EachCalculatorRefinance Calculator
See whether refinancing your loan would save you money, and how long it takes to break even on closing costs.
Current Payment
$1,688.02
New Payment
$1,419.47
Monthly Savings
$268.55
Break-Even Point
15 months
How It Works
Comparing payments
Your current remaining payment is compared against what a new loan (at a new rate and term) would cost on the same remaining balance.
Break-even point
Refinancing usually has upfront closing costs. The break-even point is how many months of monthly savings it takes to recover those costs — refinancing rarely pays off if you plan to move or pay off the loan before then.
Example Calculation
Refinancing a $200,000 balance from 7% to 5.5% can save hundreds per month — with $4,000 in closing costs, that's typically recovered within a couple of years.
Common Mistakes
- Only looking at the lower monthly payment without considering a longer new term can extend how long you're paying interest overall.
- Ignoring closing costs entirely when deciding whether refinancing is worth it.
Frequently Asked Questions
- When does refinancing make sense?
- Generally when the new rate is meaningfully lower than your current rate and you plan to stay in the loan (or home) longer than the break-even period.
- Does refinancing reset my loan term?
- Yes — unless you specifically choose a shorter term, refinancing typically restarts your amortization schedule, which can mean paying more total interest even at a lower rate if the term resets to a full 30 years.