How to Calculate Your Mortgage Refinance Break-Even Point? | reAlpha Mortgage

Refinancing your mortgage isn’t free, and it’s not always the right move. One way to tell? Calculate your refinance break-even point, the moment your monthly savings catch up with your upfront closing costs. If you're not sure how to do that, this guide breaks it down in plain language so you can decide whether refinancing is truly worth it for your situation.

Let’s help you cut through the confusion, avoid costly missteps, and walk away with a clear understanding of whether a refi really makes sense.

• Understand what a refinance break-even point is and why it matters.
• Learn how to calculate your break-even point step-by-step.
• Discover real-world examples and borrower insights.
• Avoid common refinancing pitfalls.
• Make informed decisions using tools and credible platforms.

Your refinance break-even point is the time (in months) it takes for your refinance savings to cover the closing costs you paid. After that point, you’re essentially in the “profit” zone.

Why it matters:

• Helps you decide if refinancing is financially smart.
• Avoid wasting money if you plan to sell or move soon.
• Empowers you to compare multiple loan offers with confidence.

Quick Formula:

Break-even point (in months) = Total Refinance Costs / Monthly Savings

Your lender will charge closing costs that can range from 2% to 6% of your loan amount. These typically include:

• Loan origination fees
• Appraisal fees
• Title insurance
• Taxes and recording fees

Example: If your loan amount is $300,000 and closing costs are $9,000, that’s your upfront investment.

Compare your current mortgage payment with the new estimated payment.

Example:

• Current monthly payment: $2,200
• New monthly payment after refi: $1,950
• Monthly savings: $250

Break-even = $9,000 / $250 = 36 months

That’s three years until your refinance pays off. If you plan to stay longer? It might be a smart move.

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This blog is for informational purposes only and does not constitute financial advice. Loan terms, rates, and availability are subject to change based on creditworthiness, property location, and lender requirements. Always consult with a licensed mortgage professional.

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Refinancing should save you money-not cost you extra. That’s why reAlpha Mortgage gives you back up to 75% of the buyer agent’s commission when you refinance or buy through our platform.

Here’s how it stacks up:

✅ 25% rebate for using a reAlpha agent

✅ 50% rebate when you add a reAlpha mortgage

✅ 75% rebate when you bundle Title too

That’s real cash you can put toward closing costs, home upgrades, or just keeping your savings intact.

Ready to run the numbers and see how much you can keep? Start now at reAlpha Mortgage.

It usually ranges from 24 to 36 months, depending on your loan size, interest rate difference, and upfront costs.

Use the break-even formula and compare that to how long you plan to stay in the home. If the break-even is shorter, it’s likely a good deal.

Yes, but you may not get the lowest rates. Shop around with transparent lenders like reAlpha Mortgage to understand your options.

No. Lender fees vary. Always ask for a Loan Estimate and compare.

Ready to start? Compare your break-even point today. Use free calculators, consult experts, and lean on partners that work for you, not for commissions.

Find the Perfect Mortgage for Your Dream Home with reAlpha Mortgage.

Compare options, calculate payments, and get expert guidance - all in one place.

Check if you qualify