Mortgage planning worksheet

Refinance break-even calculator

Compare your current mortgage with a lower-rate refinance, then see how long monthly savings take to recover your upfront costs.

Your scenario

Mortgage convention
Display currency
Enter your own total. Costs are assumed paid upfront, not added to the loan.
Use the remaining amortization period for both loans.

Canada mode converts a nominal rate compounded semi-annually to an effective monthly rate. Before refinancing, estimate any prepayment penalty or discharge charge separately and include it in your cost input.

Estimated break-even

12 months

You break even after 12 monthly payments.

Current monthly payment
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New monthly payment
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Monthly savings
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Lifetime interest savings
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Net savings after costs
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Planning estimate — not a lender quote

Cost recovery timeline

The green portion shows where cumulative monthly savings have recovered your entered refinance costs.

Refinance starts20-year remaining term

At break-even, cumulative monthly savings equal your upfront costs.

How the estimate works

  1. Both monthly payments use the same balance and remaining amortization, isolating the effect of the rate change.
  2. Monthly savings equal the current payment minus the new payment.
  3. Break-even months equal your entered costs divided by monthly savings, rounded up to the next whole payment.
  4. Lifetime interest savings compare total scheduled interest over the remaining term. Net savings then subtract your entered refinance costs.

Payment = P × r(1+r)ⁿ ÷ ((1+r)ⁿ − 1)

Starting figures are an editable illustration, not rate or fee guidance. This estimate assumes regular monthly payments, no extra principal payments, no taxes or insurance in the payment, and no costs rolled into the new balance.

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Frequently asked questions

What is a good break-even point for refinancing?

A useful break-even point is one that arrives before you expect to sell, move, pay off the mortgage, or refinance again. There is no universal cutoff; compare the result with your own expected holding period.

Should I include a mortgage prepayment penalty?

Yes. In Canada, include any mortgage-break penalty plus discharge, legal, appraisal, and other lender-required costs. In the U.S., include lender, title, appraisal, recording, and other transaction costs that you expect to pay.

Does this calculator assume closing costs are financed?

No. It treats closing costs as cash paid upfront. If costs will be added to the new mortgage, increase the new-loan balance accordingly in a more detailed lender illustration; financing costs also creates additional interest.

Why can lifetime savings be positive when there is no break-even?

The displayed lifetime interest figure excludes closing costs. Net savings after costs includes them. A refinance with little or no monthly payment reduction may not recover the upfront cost even when the lower rate reduces scheduled interest.

How is Canadian mortgage interest calculated?

Canada mode converts the entered nominal annual rate, compounded semi-annually, to an effective monthly rate before calculating payments. U.S. mode divides the annual rate by 12, the standard monthly convention used in U.S. mortgage illustrations.

Is this a mortgage approval or quote?

No. It is a planning estimate. Qualification, offered rates, penalties, fees, payment schedules, and contract terms come from the lender and may change the result.

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Partner offer

Know your break-even? Now check the rate.

Your break-even math only works if you can actually get the lower rate. Compare digital-lender rates at Nesto before you refinance, then re-run the calculator with the real number.

Compare refinance rates

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