- Break-even months equal closing costs divided by monthly savings.
- APR gives a better cost comparison than rate alone.
- A lower payment can still cost more if it resets the clock.
Today's average 30-year conventional rate is 6.72%, while the best-priced lenders are closer to 6.53% APR. Whether refinancing into either rate helps depends entirely on the break-even math below, not just whether the new rate looks lower.
How to choose in 60 seconds
- Estimate closing costs.
- Estimate monthly savings.
- Divide costs by savings.
- Compare the result with your expected time in the home.
- Check total interest if the term resets.
Quick picks
- Move
- Refinance
- Why
- More months to benefit after break-even.
- Move
- Skip
- Why
- Costs may not be recovered.
- Move
- Be careful
- Why
- Term reset can raise total interest.
- Move
- Recast or prepay
- Why
- May reduce payment or interest with less friction.
Current mortgage options
What break-even costs
Formula: break-even months = closing costs / monthly savings. If a refinance costs $5,000 and saves $250 per month, break-even is $5,000 / $250 = 20 months.
Estimate payment break-even and five-year financing-cost savings, including the different remaining balances.
Check your statement or loan documents
Compare refinance rates on our Compare page
Enter points and all lender and third-party costs from the Loan Estimate.
Live top rate across lenders we track — used only for the likely-savings range below, not the main result.
Monthly Savings
$175
Use this result as one input in your broader Money Map, not as a one-off number.
What to do
Use this result to narrow your next financial move.
Pre-tax estimates. For illustration only — not financial advice.
Prefer to work from your own quote instead of the example above? Enter your actual closing costs and new payment into the refinance break-even calculator and it returns your exact month count instead of the rounded example here. If the number that comes back is longer than you expected, should you refinance in 2026 covers the cases where a long break-even can still be worth it, such as escaping an adjustable-rate reset.
Choose X if
- Choose refinancing if break-even is well before your likely sale or next refinance.
- Choose waiting if the break-even is long and rates may improve. The full refinance guide also covers cash-out and HELOC alternatives if your goal is tapping equity rather than lowering the rate.
- Choose recasting if you have cash and want a lower payment without resetting the loan term or paying refinance closing costs. See the recast versus refinance comparison for how the two stack up.
- Skip refinancing if the lower payment comes mainly from extending the term.
Compare the tradeoffs
- Why it matters
- Drives break-even
- Watch-out
- No-cost loans may hide costs in rate.
- Why it matters
- Recovers costs
- Watch-out
- Lower payment can come from longer term.
- Why it matters
- Shows broader cost
- Watch-out
- Rate alone can mislead.
- Why it matters
- Determines payoff
- Watch-out
- Moving soon weakens the case.
- Why it matters
- Affects lifetime interest
- Watch-out
- 30 more years can cost more.
When this recommendation changes
Rates fall further: Waiting may improve the deal.
You plan to move: A good monthly savings number can still fail.
You shorten the term: Total interest savings can improve.
Closing costs rise: Break-even stretches out.
Before you get quotes, it also helps to know what you are shopping for. The best mortgage rates guide explains how lenders price loans day to day, so you can tell a genuinely competitive quote from one padded with extra points.
Sources and verification
- Source
- CFPB mortgage resources
- Verified
- 2026-06-26
- Verified
- 2026-06-26
- Verified
- 2026-06-26
How we ranked
We ranked refinance decisions by break-even period, APR improvement, closing costs, term impact, and homeowner timeline. We did not rank by monthly payment alone.
Compensation disclosure: SwitchWize may earn referral fees from mortgage partners. This does not affect organic rankings.
What to do next
What to Do Now
Frequently Asked Questions
How do you calculate mortgage refinance break-even?
What is a good refinance break-even period?
Should I compare mortgage rate or APR?
Can refinancing cost more even with a lower payment?
What if I plan to move soon?
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