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//// Real Estate · Mortgage

Mortgage Refinance Break-Even Calculator

Is refinancing worth it? See your exact break-even date, monthly savings, and total lifetime interest savings vs. keeping your current loan.

30yr Fixed Avg~6.8%
Standard Down20%
DTI Limit (QM)43%

Current Loan

New Loan

Monthly Savings

$247.74/mo

Break-Even

23 months

to recoup closing costs

Lifetime Interest Savings

$18,202

vs. keeping current loan

Net Savings (after costs)

$12,702

total benefit of refinancing

Payment Comparison

Current Payment

$1,971.74/mo

@ 7.25% · 27 yrs left

New Payment

$1,724.01/mo

@ 6.25% · 30 yr term

New payment is 12.6% less$247.74/mo saved → $2,973/yr

Interest Paid Over Time

YearCurrent InterestNew InterestSaved (cumul.)
Yr 1$20,186$17,407$2,779
Yr 2$40,112$34,603$5,509
Yr 3$59,757$51,575$8,183
Yr 4$79,102$68,307$10,795
Yr 5$98,123$84,785$13,338
Yr 6$116,796$100,992$15,804
Yr 7$135,095$116,911$18,185
Yr 8$152,993$132,523$20,470
Yr 9$170,458$147,808$22,650
Yr 10$187,459$162,747$24,713

Refinancing Makes Financial Sense

You'll recoup closing costs in 23 months. If you plan to stay in the home beyond that, refinancing saves you $12,702 over the life of the loan.

1

Current Monthly Payment (P&I)

P × [r(1+r)ⁿ] / [(1+r)ⁿ−1]

= $1,971.74/mo

Balance $280,000 @ 7.25% for 27 yrs

2

New Monthly Payment

P × [r(1+r)ⁿ] / [(1+r)ⁿ−1]

= $1,724.01/mo

Loan $280,000 @ 6.25% for 30 yrs

3

Monthly Savings

Current Payment − New Payment

= $247.74/mo saved

$1,971.74 − $1,724.01

4

Break-Even Point

Closing Costs ÷ Monthly Savings

= 23 months (1.9 yrs)

$5,500 ÷ $247.74/mo

5

Lifetime Interest — Current Loan

Monthly × n − Principal

= $358,845

Over 27 remaining years

6

Lifetime Interest — New Loan

Monthly × n − Principal

= $340,643

Over 30 years

7

Lifetime Interest Savings

Current Total Interest − New Total Interest

= $18,202 saved

Net (after $5,500 closing costs): $12,702 saved

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