Refinance Break-Even Calculator
See if refinancing a loan saves money and how many months it takes to break even.
Is refinancing worth it?
Refinancing swaps your loan for a new one, often at a lower rate. The saving each month must outweigh the closing costs. Divide the costs by the monthly saving to find the break-even point. If you will move before that, it is probably not worth it.
Watch the term
Resetting to a longer term can lower payments but increase total interest. We compare using the same term for a fair view.
Worked example
Last reviewed November 2026. Formulas are standard and shown in the sections above; results are estimates.
Tips and common mistakes
- Get quotes from several lenders.
- Ask for a no-closing-cost option and compare.
- Consider how long you will keep the loan.
Learn more
Frequently asked questions
What drop in rate makes it worth it?
There is no fixed rule, check the break-even months for your case.
Are closing costs included?
Yes, enter them as a total.
Does it work for car loans?
Yes for any fixed-rate loan with the same term.
Money guides for this topic
All guides →Buying a Home or Car: The Math Before You Sign
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Read guide →Extra Mortgage Payments: How Much Do They Save?
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Read guide →How Loan Interest Really Works
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Open calculator →Results are estimates and not financial advice.