6.500% illustrative rate
$2,701/mo P&I
- Monthly payment savings
- $126
- Remaining loan interest
- $410,249
- Total payments + upfront costs
- $815,249
- Net lifetime savings
- $32,886
- Closing-cost break-even
- 40 months
KEEP THE PAYOFF DATE IN VIEW
Refinance break-even calculator
How long would a lower payment take to cover your refinance costs? Compare two rate reductions using the same balance and remaining term. All starting values are editable examples, not current offers.
What if your rate were 0.5 or 1 percentage point lower? Both options keep your remaining payoff period unchanged. Replace the example values with your mortgage details.
Keep your current mortgage$2,827/mo principal & interest$448,135 remaining interest$848,135 remaining payments
6.000% illustrative rate
$2,577/mo P&I
- Monthly payment savings
- $250
- Remaining loan interest
- $373,162
- Total payments + upfront costs
- $778,162
- Net lifetime savings
- $69,973
- Closing-cost break-even
- 21 months
Lifetime means the remaining 300 months from today. Net savings subtract upfront closing costs; costs are not financed. Assumes fixed rates, fully amortizing loans, monthly payments, no extra payments or prepayment penalties. Taxes, insurance, mortgage insurance and HOA are excluded. Actual available terms may differ. Break-even compares upfront costs with monthly P&I savings.
Review my comparison with Enrique →Calculations stay on this page. Bring your numbers to your conversation.
Use the result with your plans
If your costs are $6,000 and monthly savings are $250, simple break-even is 24 months. If you expect to keep the loan only 18 months, the payment savings alone would not recover that cost. Staying longer can change that comparison, but it does not guarantee a refinance is the right choice.
This calculator compares a current fixed-rate mortgage with rates 0.5 and 1 percentage point lower. Both keep the same remaining repayment period. It uses standard monthly amortization and rounds the break-even result up to the next whole month. It does not forecast available rates.
Which costs should you enter?
Use the costs you attribute to obtaining the new mortgage, paid in cash in this model. Separate refundable escrow balances, prepaid items, and transfers between accounts from lender and settlement charges. Review the actual Loan Estimate to avoid treating every dollar of closing cash as a new financing cost.
If you plan to add costs to the new loan, take cash out, change the payoff date, or remove mortgage insurance, ask for a separate comparison. The displayed savings exclude taxes, insurance, mortgage insurance and HOA dues. Check your current servicer’s mortgage-insurance removal options before replacing a loan solely to reduce that charge.
Compare written terms
Explore Washington mortgage and refinance rates, read the refinance decision guide, or bring a Loan Estimate for review. Accessing equity? Compare the HELOC payment calculator with the cash-out refinance calculator.
Common questions
How do I calculate refinance break-even?
Divide upfront refinance costs by monthly principal-and-interest savings. For example, $6,000 divided by $250 is 24 months. Compare remaining balances and loan terms as well as that shortcut.
Does a lower payment always mean savings?
No. Extending the term or financing costs can lower the payment while increasing the balance or total interest. This calculator holds the remaining term constant and assumes costs are paid upfront.
What if I sell before break-even?
The modeled payment savings would not recover the entered upfront costs by then. Consider your expected holding period and the full written loan terms before deciding.
Source: CFPB: understanding your Loan Estimate. Educational planning only; confirm costs and eligibility with your loan officer.