Determine how long it will take to recover your closing costs.
Current Loan
$
%
New Loan Offer
%
$
Please enter valid positive numbers for all fields.
You will break even in 0 months.
Current Monthly P&I Payment:$0.00
New Monthly P&I Payment:$0.00
Monthly Savings:$0.00
Net Lifetime Savings (Approx.):$0.00
function calculateRefinance() {
// 1. Get DOM elements
var currentBalanceInput = document.getElementById('currentBalance');
var currentRateInput = document.getElementById('currentRate');
var currentTermInput = document.getElementById('currentTerm');
var newRateInput = document.getElementById('newRate');
var newTermInput = document.getElementById('newTerm');
var closingCostsInput = document.getElementById('closingCosts');
var resultsSection = document.getElementById('resultsSection');
var errorMsg = document.getElementById('errorMsg');
// 2. Parse values
var P = parseFloat(currentBalanceInput.value);
var rOldPercent = parseFloat(currentRateInput.value);
var nOldYears = parseFloat(currentTermInput.value);
var rNewPercent = parseFloat(newRateInput.value);
var nNewYears = parseFloat(newTermInput.value);
var costs = parseFloat(closingCostsInput.value);
// 3. Validation
if (isNaN(P) || isNaN(rOldPercent) || isNaN(nOldYears) || isNaN(rNewPercent) || isNaN(nNewYears) || isNaN(costs) || P 0) {
savingsEl.innerText = formatCurrency(monthlySavings);
savingsEl.className = "result-value highlight-result";
breakevenMonths = costs / monthlySavings;
var years = Math.floor(breakevenMonths / 12);
var months = Math.ceil(breakevenMonths % 12);
var timeString = "";
if (years > 0) timeString += years + " year" + (years > 1 ? "s" : "") + " and ";
timeString += months + " month" + (months !== 1 ? "s" : "");
breakevenMonthsSpan.innerText = timeString;
breakevenBadge.style.backgroundColor = "#dff0d8";
breakevenBadge.style.color = "#3c763d";
breakevenBadge.innerHTML = 'You will break even in ' + timeString + '.';
} else {
savingsEl.innerText = formatCurrency(monthlySavings);
savingsEl.className = "result-value highlight-negative";
breakevenBadge.style.backgroundColor = "#f2dede";
breakevenBadge.style.color = "#a94442";
breakevenBadge.innerHTML = 'Refinancing will increase your monthly payment. No breakeven point.';
}
var lifetimeEl = document.getElementById('resLifetimeSavings');
lifetimeEl.innerText = formatCurrency(lifetimeSavings);
if (lifetimeSavings < 0) {
lifetimeEl.className = "result-value highlight-negative";
} else {
lifetimeEl.className = "result-value highlight-result";
}
resultsSection.className = "results-section visible";
}
function formatCurrency(num) {
return '$' + num.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
}
Should You Refinance? Understanding the Math
Deciding to refinance your mortgage is one of the most significant financial decisions a homeowner can make. While a lower interest rate is attractive, it is crucial to calculate the "breakeven point"—the moment when your monthly savings outweigh the upfront costs of refinancing.
How This Calculator Works
This Mortgage Refinance Breakeven Calculator helps you visualize the financial impact of a new loan. By inputting your current loan details and comparing them with a new offer, we calculate three key metrics:
Monthly Savings: The difference in cash flow between your old and new payments.
Breakeven Point: The time it takes for your accumulated monthly savings to pay back the closing costs.
Net Lifetime Savings: The total amount you save (or lose) over the life of the loan, factoring in the extended term and interest.
Understanding Closing Costs
Refinancing isn't free. Lenders charge origination fees, appraisal fees, and title insurance, typically ranging from 2% to 6% of the loan amount. If your closing costs are $4,000 and you save $200 per month, it will take you 20 months just to recoup that expense. If you plan to move before those 20 months are up, refinancing would actually lose you money.
The "Resetting the Clock" Trap
One common pitfall in refinancing is extending your loan term. If you have 20 years left on your current mortgage and refinance into a new 30-year term, you are adding 10 years of debt payments. Even if your monthly payment drops, you might end up paying significantly more in total interest over the long run. Always check the "Net Lifetime Savings" figure in the calculator results to ensure the long-term math works in your favor.
When Is the Right Time to Refinance?
Financial experts generally suggest refinancing is a good idea if:
You can lower your interest rate by at least 0.75% to 1%.
You plan to stay in the home longer than the breakeven period.
You want to switch from an Adjustable Rate Mortgage (ARM) to a Fixed Rate Mortgage for stability.