How to Calculate Refinance Break-Even
What is Refinance Break-Even?
Refinance breakeven determines how many months you must keep a refinanced loan to recover closing costs. Compares current and new loan expenses to find the payoff point.
Formula
Breakeven months = Refinance costs / Monthly savings
Step-by-Step Guide
- 1Calculate refinance costs (appraisal, title, processing)
- 2Find monthly payment difference between loans
- 3Divide total costs by monthly savings
Worked Examples
Input
Costs: $3k, Monthly saving: $200
Result
Breakeven: 15 months
Keep loan 15+ months to benefit
Common Mistakes to Avoid
- ✕Ignoring prepaid interest and fees
- ✕Not accounting for tax deduction changes
Ready to calculate? Try the free Refinance Break-Even Calculator
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