Calculation Logic
The break-even point is found by dividing your total closing costs by your total monthly savings. Monthly savings include the difference between your old and new payment, plus any PMI savings and rate-drop savings. The cumulative savings chart shows exactly when your savings line crosses your costs line.
How to Use
- Enter your current monthly payment and your expected new payment after refinancing.
- Add your total closing costs (or estimate with our Closing Cost Estimator).
- If refinancing removes PMI, add that monthly savings.
- If your rate drop creates additional savings beyond the payment change, include that too.
- Click Calculate Break-Even to see the months to break-even and 5-year net savings.
Pro Tips
- Do not forget PMI: Removing PMI can shave 10–20 months off your break-even point.
- The 5-year test: If you plan to move within 5 years, make sure your 5-year net savings are positive.
- Closing costs are negotiable: Some lenders offer credits. Lower closing costs = faster break-even.