Investor Tools
Refinance Break-Even Calculator
Enter the current loan, proposed refinance, and estimated costs to compare monthly P&I.
Illustrative example
$500,000 refinance comparison
For a 7.50% current loan with 25 years remaining and a 6.50% new 30-year loan, the calculated monthly P&I difference is $535. With $15,000 of illustrative costs, simple break-even is 28.1 months, or approximately 2.3 years.
What simple break-even omits
This analysis does not automatically account for cash-out proceeds, increased loan balance, prepaid interest, escrow funding, taxes, opportunity cost, prepayment penalties, rate resets, balloons, maturity or extension fees, property-income changes, or investment return on released cash.
Frequently asked questions
What is a refinance break-even period?+
Simple break-even estimates how many months of monthly P&I savings are needed to recover estimated refinance transaction costs.
Why might a refinance have no simple break-even period?+
If the proposed monthly P&I payment is equal to or greater than the current payment, there are no monthly payment savings to divide into refinance costs.
How does cash-out affect break-even analysis?+
Cash-out introduces additional leverage and proceeds. A payment-savings calculation alone does not measure the full economic tradeoff or how released cash may be used.
What costs are not included automatically?+
Only the refinance-cost amount you enter is used. Prepaid interest, escrows, taxes, opportunity cost, prepayment penalties, extension fees, and other transaction effects require separate analysis.
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