Refinance Break-Even Calculator
Whether a refinance actually saves you money once closing costs and a reset term are baked in. We compute monthly savings, break-even months, and lifetime interest impact — and rank it against the same thresholds TrueOwn uses to flag refi opportunities on real mortgages.
What you still owe on the existing mortgage.
Annual rate.
Approximate. Used for context — refinancing replaces this term.
The rate you've been quoted on the refi.
Origination, title, recording, taxes, prepaids. Use the Loan Estimate total.
Used to compute new LTV (loan-to-value). Leave blank to skip.
Refinancing into a longer term lowers monthly payment but can extend total interest paid.
Strong · $231 / mo vs current
$1,678 new monthly P&I (principal and interest)
- New Principal
- $280,000
- New Interest
- $324,347
- Closing costs
- $6,500
- Monthly savings
- $231
- Break-even
- 29 mo
- Lifetime interest impact
- $76,786
- New LTV (loan-to-value)
- 71.6%
Free during pilot
How refinancing changes your loan
Refinance economics come down to four numbers: how much your monthly principal-and-interest drops, what closing costs you're financing or paying out of pocket, how long it takes the savings to repay those costs, and what the total interest looks like over the new term.
Monthly savings is the difference between your current monthly P&I (principal and interest) and the new monthly P&I on the same balance at the new term. Break-even months is closing costs divided by monthly savings — rounded up. Lifetime interest impact is the difference between total interest under the current loan (over the new term length, for an apples-to-apples comparison) and total interest under the new loan, net of closing costs.
How we classify the result
- Strong opportunity — monthly savings ≥ $150 and break-even ≤ 36 months.
- Moderate opportunity — monthly savings ≥ $75 and break-even ≤ 48 months.
- Marginal — break-even ≤ 60 months but doesn't clear the moderate-savings bar.
- Not beneficial — monthly savings ≤ 0 or break-even beyond 60 months.
What this calculator deliberately excludes
- FHA MIP (FHA mortgage insurance) / conventional PMI (private mortgage insurance). If you're moving off FHA permanent MIP, use the FHA → conventional calculator instead.
- Cash-out scenarios. Pulling equity changes the new balance and often the rate; that's a different calculation.
- Tax effects. Mortgage interest deductibility is taxpayer-specific and beyond a generic estimator.
Frequently asked questions
What is a break-even point in a refinance?
Break-even is how many months it takes for your monthly savings to repay what you spent on closing costs. If refinancing saves you $200 per month and closing costs are $6,000, break-even is 30 months. If you sell or refinance again before hitting that point, you may not come out ahead. This calculator estimates break-even based on the numbers you enter; your actual numbers will depend on the rate and costs on the day you lock.
Why does refinancing sometimes cost more over the life of the loan even when the monthly payment drops?
When you refinance, you typically reset to a new 30-year term — which means you're spreading your remaining balance over more years. Even at a lower interest rate, paying interest for a longer period can mean more total interest paid over the life of the loan. This calculator shows the estimated lifetime interest impact alongside the monthly savings, so you can see both sides of the trade-off.
What counts as a 'strong' refinance opportunity in this calculator?
The calculator labels a refi as a strong opportunity when the estimated monthly savings are $150 or more and the break-even is 36 months or less. A moderate opportunity is $75+ in savings with a break-even of 48 months or less. These thresholds are the same ones TrueOwn uses when monitoring real mortgages — they're not a personalized recommendation, just a benchmark for comparing scenarios.
What does this calculator not include?
This calculator models a rate-and-term refinance only — one that changes the rate or term without taking cash out. It does not model cash-out refinances, FHA MIP (FHA mortgage insurance), conventional PMI (private mortgage insurance), or escrow adjustments. It also doesn't account for the tax effect of mortgage interest, which is specific to your situation. For cash-out scenarios, use the Cash-Out Refinance calculator. For FHA MIP removal, use the FHA to Conventional calculator.
Related calculators
Estimates only — not a refinance recommendation or lender quote. This calculator models a rate-and-term refi (a refi that only changes the rate or term, no cash out) only; it does not model cash-out scenarios, FHA MIP (FHA mortgage insurance), conventional PMI (private mortgage insurance), or servicer-specific escrow adjustments. Resetting to a new 30-year term can extend total payback even when monthly P&I (principal and interest) drops. Confirm any actual refi terms against a published Loan Estimate. Methodology last reviewed: May 26, 2026.