What is the break-even point on a refinance?

The number of months it takes for the monthly savings to add up to the closing costs. If you expect to sell or refinance again before then, the new loan has not paid for itself. It is a quick test, not the whole story: a longer new term can lower the payment while raising the total interest.

Why compare interest over a number of years instead of the whole loan?

Because few people keep a mortgage for 30 years. The comparison counts the interest each loan costs over the years you choose, plus closing costs, and takes into account the balance each loan leaves at the end, so a new 30-year term is not mistaken for savings just because its payment is lower.

Does a cash-out refinance change the result?

The cash you take out is added to the new loan, which raises the payment and the interest. The money itself is neither a cost nor a saving here — you receive it and owe it back — so the comparison shows what borrowing it costs over your horizon.

What closing costs does a Florida refinance have?

Lender fees, appraisal, title and recording, plus Florida's documentary stamp tax on the new note and the intangible tax on the new mortgage. Some of the state tax may be reduced when the new loan replaces an existing one with the same lender and borrower; the closing agent calculates it.

Is this a rate quote?

No. The site does not quote or predict rates; enter the rate a lender has offered you. The lender's Loan Estimate is the figure that counts.

Refinance Break-Even Calculator

Compare your current mortgage with a new one from the lender's quote: the new payment, the monthly change, how many months it takes to recover the closing costs, and the interest each loan costs over the years you plan to keep it.

Refinance break-even

Enter your current balance, rate and years left, and the new rate, to compare.

An estimate from your own numbers — not financial, tax or legal advice. Rates and closing costs are the ones you enter; the lender's Loan Estimate is the figure that counts, and only a lender can say what you qualify for. Talk to a licensed agent and a lender before you decide.

How it's calculated

Payments: the standard fixed-rate formula — your balance at the current rate over the years left, and the new balance (plus any cash out or financed costs) at the new rate over the new term. Principal and interest only; escrow is the same either way.
Break-even months = closing costs ÷ monthly savings, rounded up.
Over your horizon: interest paid on each loan plus closing costs, counting the balance each loan leaves at the end, so the comparison is between what each option costs — not just what it charges each month.

Florida notes

State taxes on the new loan: doc stamps of $0.35 per $100 on the note and intangible tax of 0.2% on the mortgage. See the closing tax calculator; the closing agent applies any reduction for replacing an existing loan.
Homestead stays: refinancing does not change your homestead exemption or Save Our Homes cap; a sale does.
Insurance and escrow are not in these payments. If your premium has risen, that changes the escrow part of the payment whether or not you refinance.

An estimate from your own numbers, not financial, tax or legal advice. The site does not quote or predict rates. Talk to a lender about what you qualify for and a licensed agent if selling is on the table.

Thinking of selling instead?

If the numbers point to a move rather than a refinance, a licensed real-estate professional can prepare a free comparative market analysis of what your home might sell for, and show you what is available.

Get a free CMA Buying your next home? Talk to a licensed agent (954) 703-4504

Refinance questions

What is the break-even point on a refinance?: The number of months it takes for the monthly savings to add up to the closing costs. If you expect to sell or refinance again before then, the new loan has not paid for itself. It is a quick test, not the whole story: a longer new term can lower the payment while raising the total interest.
Why compare interest over a number of years instead of the whole loan?: Because few people keep a mortgage for 30 years. The comparison counts the interest each loan costs over the years you choose, plus closing costs, and takes into account the balance each loan leaves at the end, so a new 30-year term is not mistaken for savings just because its payment is lower.
Does a cash-out refinance change the result?: The cash you take out is added to the new loan, which raises the payment and the interest. The money itself is neither a cost nor a saving here — you receive it and owe it back — so the comparison shows what borrowing it costs over your horizon.
What closing costs does a Florida refinance have?: Lender fees, appraisal, title and recording, plus Florida's documentary stamp tax on the new note and the intangible tax on the new mortgage. Some of the state tax may be reduced when the new loan replaces an existing one with the same lender and borrower; the closing agent calculates it.
Is this a rate quote?: No. The site does not quote or predict rates; enter the rate a lender has offered you. The lender's Loan Estimate is the figure that counts.

Tell us what you need

Selling, buying, renting or moving to Florida — a licensed real-estate professional will contact you. No obligation.

Licensed brokerage

Premier Real Estate Group Inc

Broker of record Maxim Bohadana, Florida broker license BK3314523

(954) 703-4504