CalculynQuick answer
Dropping a $300,000 loan from 7.5% to 6.0% saves about $305/month. With $5,000 in closing costs, you break even in about 17 months.
How it works
Refinancing trades closing costs for a lower monthly payment. The break-even point is how long until the savings repay those costs — worth it if you'll stay past that point.
Formula
Break-even months = Closing costs ÷ Monthly savings
Assumptions & limitations
- Results are rounded for display.
Frequently asked questions
What if I plan to move soon?
If you'll sell before the break-even point, refinancing usually loses money.