Net refinance savings after closing costs across any loan type

Closing Costs Can Eat the Savings

A refinance saves on interest but usually costs money upfront — origination fees, appraisal, title insurance, and processing. Low-rate refinances sometimes cost more in fees than they save in the first two years. The break-even point tells you how many months to hold the loan before savings exceed fees.

The Break-Even Rule

A common guideline: refinance only if you plan to hold the loan at least until the break-even month. Refinancing a mortgage with a 24-month break-even makes sense if you plan to stay in the house 3+ years. If you plan to sell in a year, the refinance is a net loss. This calculator computes break-even directly so the decision is about cashflow horizon, not just rate difference.

Quick example

With current loan balance of 250,000 and current rate of 7 (plus new rate of 5.5 and years remaining of 25), the result is 64,530.00. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.

Which inputs matter most

You enter Current Loan Balance, Current Rate, New Rate, Years Remaining, and Closing Costs. Not every input has equal weight. Flip one at a time toward extreme values to feel which ones move the needle most for your situation.

What's happening under the hood

Computes monthly payment at each rate using standard amortization, multiplies the monthly difference by months remaining for gross savings, subtracts closing costs for net. Break-even divides closing costs by monthly savings. Does not account for PMI, escrow, or tax deductibility. Results are estimates for illustration purposes only. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.

Reading the output honestly

The payoff date assumes every payment lands on time and at the amount you entered. In reality, months with unexpected expenses happen. Treat the figure as the best-case timeline and add a buffer for life if you want a realistic target.

What this doesn't capture

Real payoff journeys include missed payments, fee changes, balance transfers, and promotional rates that reset. The calculation assumes a steady plan; reality is rarely that clean. Use the figure as the best-case plan against which actual progress gets measured.