Refinance Break-Even Calculator
How long before the fees are recovered.
Work out Refinance Break-Even. How long before the fees are recovered. No rate is assumed — every figure is yours to set.
Break-even point
20 months
saving 200 a month against 4,000 of costs
The break-even point is simply the up-front cost divided by the monthly saving. The real question is whether you will still hold the loan then — refinancing and moving eighteen months later at a twenty-month break-even loses money. A lower payment achieved by extending the term is not the same as a saving. Stretching twenty remaining years back out to thirty cuts the monthly figure and can raise total interest substantially, and this calculation cannot see that. Compare total interest as well. Costs vary widely and some can be rolled into the balance, which hides them in the payment rather than removing them.
How the Refinance Break-Even Calculator works
Enter both monthly payments and the up-front costs for the break-even point. The real question is not whether it breaks even but whether you will still hold the loan by then — refinancing and moving before that point loses money.
Also known as: should i refinance calculator · mortgage refinance calculator · remortgage break even calculator · refinance closing costs calculator
Not financial advice. This calculator is for planning and illustration, not financial advice. Real products carry fees, taxes, and terms it does not model. Confirm figures with your lender or a qualified adviser before committing.
Frequently asked questions
How do I calculate the break-even on a refinance?
Divide the up-front costs by the monthly saving. £4,000 of costs against £200 a month saved breaks even after 20 months.
Is a lower monthly payment always a saving?
No, and this is the trap. A lower payment achieved by extending the term can raise total interest substantially. Compare total interest as well as the monthly figure before deciding.
What counts as closing costs?
Arrangement and valuation fees, legal costs, and any early repayment charge on the existing loan. Some can be rolled into the balance, which hides them in the payment rather than removing them.
When is refinancing not worth it?
When the break-even is longer than you expect to keep the loan, when an early repayment charge outweighs the saving, or when the lower payment comes purely from a longer term.
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