What is the break-even point on a refinance?
Answered by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
The break-even point is when your monthly savings have added up to cover the refinance's closing costs. Divide total costs by monthly savings to get the number of months — say $6,000 in costs and $200 saved monthly breaks even at 30 months.
If you'll keep the home past break-even, refinancing pays off. We calculate yours precisely so you don't refinance into a loss.
Where savings catch up
The break-even point is when your monthly savings from refinancing equal the closing costs you paid. After that point, the refinance starts saving you money.
If you spend $6,000 to save $200 a month, you break even in 30 months.
Why it matters
If you plan to keep the home past the break-even point, refinancing pays off. If you might sell sooner, it may not be worth it.
We calculate your break-even before you commit. Apply now and we will tell you if the timing works.