MCPCalc

Refinance Break-Even Calculator

Calculate when refinancing pays off given new loan terms and closing costs.

Scratchpad (not saved)

$

Remaining balance on your current mortgage

%

Your current mortgage interest rate

months

Months remaining on your current mortgage

%

Interest rate on the new loan

Term of the new loan

$

Total closing costs for refinancing

What This Calculator Does

Compare your current mortgage with a refinance option to find how long monthly savings take to offset upfront closing costs.

It combines Current Loan Balance, Current Interest Rate, Remaining Term (months), New Interest Rate to estimate Break-Even Point, Monthly Savings, Current Payment.

Formula & Method

Core equations: Monthly savings from refinancing: S = M_{old} - M_{new} where each payment uses: M = P \cdot \frac{r(1+r)^n}{(1+r)^n - 1} Break-even point in months: \text{Break-Even} = \left\lceil \frac{\text{Closing Costs}}{S} \right\rceil Inputs are applied in base units, then derived metrics are computed from the same equations and rounded for display.

Notation used in the formulas: R = Break-Even Point; x_{1} = Current Loan Balance; x_{2} = Current Interest Rate; x_{3} = Remaining Term (months); x_{4} = New Interest Rate; x_{5} = New Loan Term; x_{6} = Closing Costs.

Method summary: inputs are normalized to consistent units, core equations are evaluated, then secondary values are derived and rounded for display.

Use this before refinancing to confirm whether expected savings justify fees within your planned time in the home.

Inputs Used

  • Current Loan Balance: Remaining balance on your current mortgage
  • Current Interest Rate: Your current mortgage interest rate
  • Remaining Term (months): Months remaining on your current mortgage
  • New Interest Rate: Interest rate on the new loan
  • New Loan Term: Term of the new loan
  • Closing Costs: Total closing costs for refinancing

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