Refinance Break-Even Calculator
Calculate your monthly savings, total interest saved, and break-even point. See if refinancing makes financial sense for your Bergen County home.
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How the Break-Even Calculator Works
Our refinance calculator compares your current mortgage to a potential new loan by analyzing four critical metrics:
1. Monthly Payment Savings
Difference between your current and new monthly payment. This immediate cash flow improvement impacts your budget right away.
Monthly Savings = Current Payment - New Payment
2. Total Interest Savings
How much less interest you'll pay over the life of the new loan compared to keeping your current mortgage.
Interest Saved = Current Total Interest - New Total Interest
3. Break-Even Point
Number of months required for your monthly savings to recover the refinancing closing costs. Critical decision factor.
Break-Even = Closing Costs ÷ Monthly Savings
4. Net Lifetime Savings
True financial benefit after subtracting closing costs from total interest savings. Your actual profit from refinancing.
Net Savings = Interest Saved - Closing Costs
Bergen County Refinance Example
Ridgewood homeowner with $500,000 remaining balance at 7.0% interest (25 years remaining)
Current Mortgage
New Refinance (6.0%)
Savings Summary
Monthly Savings
$311
Total Interest Saved
$93,300
Break-Even (at $10K costs)
32 months
Verdict: With a 32-month break-even, this refinance makes sense if the homeowner plans to stay for at least 3 years. Net lifetime savings after closing costs: $83,300.
When Does Refinancing Make Sense?
Break-even under 36 months
If you plan to stay in your home beyond the break-even point, refinancing saves money
Rate drop of 0.75% or more
Larger rate reductions create faster break-even and greater savings
Positive net lifetime savings
Total interest saved must exceed closing costs for refinancing to be worthwhile
Long-term homeownership plans
The longer you stay beyond break-even, the more you save. Consider selling timeline.
Refinance Break-Even FAQs
How do I calculate refinance break-even?
Break-even = closing costs ÷ monthly savings. Example: $8,000 closing costs ÷ $250 monthly savings = 32 months break-even. You must stay in your home beyond this point to benefit from refinancing. Our calculator shows exact break-even timeline.
What is a good break-even point for refinancing?
Break-even under 36 months (3 years) is generally worthwhile if you plan to stay in your home. Break-even under 24 months is excellent. Longer break-even periods require careful consideration of how long you intend to keep the property.
Should I refinance if my rate drops 0.5%?
A 0.5% rate drop can be worthwhile on large loan balances. On $500K loan, 0.5% reduction saves ~$155/month ($55,800 over 30 years). Use our calculator to see if break-even timeline fits your plans. Generally 0.75-1% drop is the sweet spot.
What closing costs should I expect for refinancing?
Refinance closing costs typically range 2-5% of loan amount. Bergen County $400K refinance costs $8,000-$20,000 including appraisal ($400-$800), title insurance ($700-$1,500), origination fees (0.5-1.5%), attorney fees ($1,000-$2,000), and recording fees.
Get a Personalized Refinance Quote
Contact Jimmy Joseph MBA for accurate closing cost estimates and current Bergen County refinance rates.
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