How many months until a refinance has paid for its closing costs
Estimates only, not financial advice. What you type stays on your device. Checked against sources on 6 Oct 2026.The break-even point is the month the savings from a refinance have repaid its closing costs. Rolling $6,000 of costs into a $300,000 refinance at 6.25% gives a payment of $1,884.09 against $2,112.58 now, $228.49 less. Dividing the costs by the saving says 27 months; counting the interest on the larger loan, it is 28. Selling or refinancing again before then loses money.
Enter the current balance, rate and years left, then the new rate and term.
Enter the total closing costs and choose cash or rolled into the loan.
Read the break-even month, counted on interest saved.
Compare it with how long you expect to keep the home.
The Refinance Calculator compares the loan you have with the one a lender is offering. Enter what you still owe, your current rate and the years left, then the new rate, term and closing costs. It shows the new payment, the monthly saving, the month the refinance pays for itself, and the interest on each loan.
Two break-even figures. The rule of thumb divides the closing costs by the monthly saving. The headline figure counts interest instead: the first month in which the interest saved so far equals the closing costs. The two differ when the new term is longer or shorter, or when costs or cash are added to the loan. A 15-year refinance can raise the payment and still break even quickly, because so much less interest is charged.
Cash or rolled in. Paying the costs in cash keeps the new loan the same size as your balance. Rolling them in avoids cash at closing, but the loan is larger and you pay interest on the costs for the whole term.
The rest of the article, and all 6 questions about Refinance Calculator, are on the Refinance Calculator page.
The simple method divides the closing costs by the monthly saving: $6,000 ÷ $265.43 is 22.6, so about 23 months. A fuller method finds the month when the interest saved reaches the costs, which also counts a longer term or interest on rolled-in costs. Both figures are shown.
Often, if you keep the home past the break-even month. On $300,000 with 27 years left, going from 7.25% to 6.25% saves $265.43 a month and repays $6,000 of costs in about two years. Restarting a 30-year term cuts the lifetime saving to $13,502, so compare terms as well as rates.
Paying cash keeps the loan smaller and the saving larger. Rolling $6,000 into a $300,000 loan at 6.25% adds $36.94 to the payment and about $7,300 of interest over 30 years. Rolling them in makes sense when cash is short or will earn more elsewhere.
Escrow for property tax and insurance, mortgage insurance, points bought to lower the rate, tax deductions and adjustable rates are not modelled. A prepayment penalty on the current loan should be added to the closing costs. Every rate and cost is an input, so use the figures from a real Loan Estimate.
Rates and rules change; check the source before you rely on a figure.
Still stuck? Ask about Refinance Calculator and anybody who knows can answer. No account needed.
On the related tools: FHA MIP Calculator – Upfront and annual FHA mortgage insurance, and whether it lasts 11 years or the whole loan · Lease vs Buy Car Calculator – Compare leasing a car with financing the same car over the lease term.