Refinance Formula Explained
The math behind the Refinance Calculator: the equation, the variables, and the assumptions it makes.
By Onias Derilus, Mortgage Capital · NMLS# 1859012 · Last Updated: June 2026
It compares your current mortgage to a new one and shows your monthly savings, the closing costs, and the break-even point where refinancing starts paying off.
The Formula
Break-even months = closing costs / monthly savings
A refinance makes sense when you stay in the home past the break-even point. If you plan to sell or refinance again before then, the closing costs outweigh the savings.
Resetting the term matters. Refinancing a 25-years-remaining loan back to 30 years lowers the payment but can raise total interest. The calculator shows the monthly trade-off so you can judge the long-term cost.
Turn Your Refinance Estimate Into a Real Pre-Approval
Get a personalized rate quote from a licensed Florida mortgage broker — no obligation. NMLS# 1859012.
Rates are illustrative only. APR and payments vary by credit score, loan amount, and market conditions. Subject to credit approval. Not a commitment to lend. NMLS# 1859012. Equal Housing Lender.