Refinance Savings vs. Closing Costs: How Long to Achieve a

Discover how long it takes to recoup closing costs when refinancing with our easy-to-use calculator.

How the formula works

The break-even point is calculated by dividing total closing costs by your monthly savings. The result shows you how many months or years it will take to offset the upfront fees.

Example: $6,000 costs and $150 savings

In this example, if closing costs are $6,000 and your new monthly payment is $150 less than your current payment:

• Monthly savings: $150
• Break-even point (total closing costs / monthly savings): 40 months

Typical closing costs

Closing costs vary by lender and location, but they typically include:

• Loan origination fee (points)
• Appraisal fee
• Title search and insurance fees
• Escrow deposit
• Transfer taxes

No-closing-cost refinance

Some lenders offer no-closing-cost refinances. While this eliminates upfront fees, you may end up with a higher interest rate or additional charges over the life of your loan.

Glossary

• Loan origination fee (points): A fee charged by the lender to cover the costs of processing a mortgage loan.
• Lender credits: Fees that can be applied as discount points to lower your interest rate or paid by the lender upfront, which may increase your closing costs.
• Discount points: Payments made at closing to reduce the interest rate on a mortgage loan.

Legal/Compliance Caveat

This calculator is for educational purposes only and does not constitute financial advice. Your actual savings may vary based on your individual circumstances and lender fees.