How do I calculate the break-even point on a refinance?

Divide your total closing costs by your monthly payment savings. If the refinance costs $6,000 and saves you $300 a month, you break even in 20 months. Past that point the savings are yours.

← All Tools Refinance Break-Even

Don't refinance until the math says so.

Q: Is the 1% rate-drop rule a good way to decide?

No. The old rule of thumb to refinance when rates drop half a point or a full point ignores your loan size, your costs, and how long you will stay. Run the actual break-even on your numbers instead.

Q: Should I roll closing costs into the loan?

You can, and it preserves cash, but it raises your loan balance and slightly raises the payment, which pushes the break-even point out. The math still works if you keep the loan past break-even.

A lower rate only helps if you stay long enough to earn back the closing costs. See your new payment, your monthly savings, the exact month you break even, and what's left over if you keep the loan.

You break even in

0 mo

New Payment

principal & interest

Monthly Savings

vs current P&I

Net 5-Yr Savings

after costs

Old vs new

Current payment at current rate$0

New payment at new rate and term$0

Monthly savings$0

All-in cost to refinance$0

Break-even point0 months

Worth a real rate quote?

This shows the break-even on your assumptions. I'll pull an actual rate for your credit and property, factor in Florida doc stamps and any seasoning rules, and tell you straight whether the refi pencils. No pressure either way.

Get a refinance quote

Refinance Questions

How do I calculate the break-even point?

Divide your total closing costs by your monthly payment savings. If the refinance costs $6,000 and saves $300 a month, you break even in 20 months. Past that point the savings are yours.

Is the 1% rate-drop rule a good way to decide?

No. That rule of thumb ignores your loan size, your costs, and how long you'll stay. Run the actual break-even on your numbers instead.

Should I roll closing costs into the loan?

You can, and it preserves cash, but it raises your balance and the payment a little, which pushes break-even out. The math still works if you keep the loan past break-even.

Is there a waiting period to refinance in Florida?

Many lenders enforce a seasoning period, often around 6 months from your last closing. Cash-out refinances on rentals are usually capped near 75% loan-to-value.

Educational planning tool only. Break-even is closing costs divided by monthly principal-and-interest savings and does not include taxes, insurance, or the effect of resetting your amortization schedule. Lifetime and 5-year figures are estimates based on your inputs. Actual rates, costs, and savings depend on your credit, property, and the loan program at the time of application. This is not a pre-approval, rate lock, or commitment to lend. © The Mortgage Dock · NMLS #1983384 · Coast2Coast Mortgage, LLC NMLS #376205 · Equal Housing Lender.