How many months until a refinance recovers its closing costs? See the break-even, the new versus old payment, and your net savings at 1, 3, and 5 years.
Estimates for informational purposes only — not a loan offer, commitment, financial advice, or a lending decision. Program limits shown are illustrative and vary by lender.
A refinance trades an upfront cost (closing) for a lower monthly payment. The break-even is simply how long those savings take to repay the cost. If your expected hold is longer than the break-even, refinancing puts money back in your pocket; if it's shorter, you'll sell before you recoup the fees.
For buy-rehab-rent-refinance-repeat investors, the refinance isn't primarily about a lower payment — it's about pulling your capital back out to buy the next property. When that's the goal, judge the cash-out against your cost of capital, and use the break-even here only as a check on the payment side.
It's how long the monthly payment savings take to repay the closing costs: break-even months = closing costs ÷ monthly savings. If you'll hold past that point, the refi pays for itself.
On payment alone, no. But a cash-out refi can still make sense — pulling equity to fund the next deal (the BRRRR strategy) is about capital recycling, not just a lower payment.
The break-even here is payment-based. Enter a cash-out amount for context, but weigh cash-out against the cost of that capital separately from the payment math.