Refinancing almost always costs money upfront — a discharge fee from your current lender, an application or settlement fee on the new loan, sometimes offset by a cashback incentive. The question is not whether the new rate is lower, but how long it takes for the lower repayment to pay back those upfront costs.
This calculator compares your current monthly repayment against the new loan's repayment, then divides your net switching costs by that monthly saving to find the break-even month. Before that month, you are behind. After it, every month is pure saving.
Why resetting your loan term matters
Many refinances reset the loan back to a fresh 30-year term, even if you only had 20 years left. That lowers your monthly repayment — sometimes dramatically — but stretches interest payments over a longer horizon. It is entirely possible for a lower-rate refinance with a reset term to cost more in total interest than staying put. This calculator shows total interest saved separately from the monthly break-even, so you can see both effects.
What counts as a switching cost?
Discharge (exit) fees from your current lender typically run $150–$400. New loan application, valuation and settlement fees vary widely by lender, from $0 to around $800. Cashback offers, common in competitive refinance markets, can range from $1,500 to $4,000 and directly reduce your net switching cost — sometimes to zero or below.
When refinancing never breaks even
If the new rate is not enough lower than your current rate, the monthly saving can be too small to recover the switching costs within your remaining loan term — or the new rate may not be lower at all once fees are considered. In both cases the calculator flags the result as never breaking even, so you can weigh whether a smaller, more targeted rate negotiation with your current lender makes more sense than switching.