Mortgage Refinance Break-Even Calculator

How long will it take to break even on a mortgage refinance? That depends on a multitude of factors, including your current interest rate, the new potential rate, closing costs and how long you plan to stay in your home. Use this calculator to sort through the confusion and determine if refinancing your mortgage is a sound financial decision. Click the "View Report" button for a detailed look at your records.

Calculators provided by Bankrate.com

Mortgage refinance break-even calculator

Original mortgage
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Original monthly payment: $0

Original loan amount:

Appraised value:

Original interest rate:

Term in years:

Years remaining:

Income tax rate:

Income tax rate

Your current income tax rate. Use the table below to assist you in estimating your federal tax rate.

Filing Status and Income Tax Rates 2017^*
Tax Rate	Married Filing Jointly or Qualified Widow(er)	Single	Head of Household	Married Filing Separately
10%	$0 - $18,650	$0 - $9,325	$0 - $13,350	$0 - $9,325
15%	$18,650 - $75,900	$9,325 - $37,950	$13,350 - $50,800	$9,325 - $37,950
25%	$75,900 - $153,100	$37,950 - $91,900	$50,800 - $131,200	$37,950 - $76,550
28%	$153,100 - $233,350	$91,900 - $191,650	$131,200 - $212,500	$76,550 - $116,675
33%	$233,350 - $416,700	$191,650 - $416,700	$212,500 - $416,700	$116,675 - $208,350
35%	$416,700 - $470,700	$416,700 - $418,400	$416,700 - $444,550	$208,350 - $235,350
39.6%	Over $470,700	Over $418,400	Over $444,550	Over $235,350
^*Caution: Do not use these tax rate schedules to figure 2016 taxes. Use only to figure 2017 estimates. Source: Rev. Proc. 2016-55

Report amortization:

Report amortization

Annually

Monthly

New mortgage
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New monthly payment: $0

Please view the report to see detailed results in tabular form.

Break Even with KJE1 in closing costs
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Please view the report to see detailed results in tabular form.

Monthly Payment Breakdown
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Please view the report to see detailed results in tabular form.

Total Remaining Payments: Current KJE1, New KJE2
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Definitions

Original mortgage amount: Original amount of your mortgage.
Appraised value: The appraised value of your home when you purchased it.
Current interest rate: The annual interest rate for the original loan.
Current term in years: Total length of your current mortgage in years.
Years remaining: Number of years remaining on your current mortgage.
Income tax rate: Your current income tax rate. Use the table below to assist you in estimating your federal tax rate.
Filing Status and Income Tax Rates 2017^*
Tax Rate Married Filing Jointly or Qualified Widow(er) Single Head of Household Married Filing Separately
10% $0 - $18,650 $0 - $9,325 $0 - $13,350 $0 - $9,325
15% $18,650 - $75,900 $9,325 - $37,950 $13,350 - $50,800 $9,325 - $37,950
25% $75,900 - $153,100 $37,950 - $91,900 $50,800 - $131,200 $37,950 - $76,550
28% $153,100 - $233,350 $91,900 - $191,650 $131,200 - $212,500 $76,550 - $116,675
33% $233,350 - $416,700 $191,650 - $416,700 $212,500 - $416,700 $116,675 - $208,350
35% $416,700 - $470,700 $416,700 - $418,400 $416,700 - $444,550 $208,350 - $235,350
39.6% Over $470,700 Over $418,400 Over $444,550 Over $235,350
^*Caution: Do not use these tax rate schedules to figure 2016 taxes. Use only to figure 2017 estimates. Source: Rev. Proc. 2016-55
Calculate balance: To let the calculator determine your remaining balance, based on your original loan information and years remaining, check this box. To enter your own amount, leave this box unchecked.
Current appraised value: The current appraised value of your home.
Loan balance: Balance of your mortgage that will be refinanced.
New interest rate: The annual interest rate for the new loan.
New term in years: Number of years for your new loan.
Loan origination rate: This is the percentage of the new mortgage that is paid to the lender as the loan origination fee. Typically, this fee is 1% of the loan balance.
Points paid: This is the number of points paid to the lender to reduce the interest rate on the mortgage. Each point costs 1% of the new loan amount.
Other closing costs: Estimate of all other closing costs for this loan. This should include filing fees, appraiser fees and any other miscellaneous fees paid.
Monthly PMI payment: Monthly cost of Principal Mortgage Insurance (PMI). For loans secured with less than 20% down, PMI is estimated at 0.5% of your loan balance each year. Monthly PMI is calculated by multiplying your starting loan balance by this percent and dividing by 12. When the equity in your home exceeds the percentage required for PMI, your PMI payment drops to zero.
Normally PMI is required if you have less than 20% equity in your home, however for the refinance of loan guaranteed by Freddie Mac or Fannie Mae you may not be required to pay PMI if your current mortgage doesn't require it. Check with your lenders for details. Check the box "do NOT include PMI" if this applies to your refinance.
Current payment: Your current payment is the sum of principal, interest and PMI (Principal Mortgage Insurance). Because refinancing does not affect your insurance or taxes, they are not included here.
New payment: Your new payment is the sum of principal, interest and PMI.
Monthly PI payment: Monthly principal and interest payment.
Break even monthly payment savings: The number of months it will take for your monthly payment reduction to be greater than closing costs.
Break even PMI & interest savings: The number of months it will take for your interest and PMI savings to exceed your closing costs.
Break even total savings after-tax: The number of months it will take for your after-tax interest and PMI savings to exceed your closing costs.
Break even total savings vs. prepayment: This is the most conservative break even measure. It is the number of months it will take for your after-tax interest and PMI savings to exceed both your closing costs and any interest savings from prepaying your mortgage. The prepayment amount used in this calculation is the amount that you would have to spend on closing costs.