Mortgage Refinance, Remortgage & Switching Break-Even Calculator

Updated Oct 2026

Scenario and horizonSet the market, rate convention, comparison type, holding period, and property value.

Market and currency

Controls the displayed currency and the market-default interest-rate convention. It does not load live rates, taxes, eligibility rules, or lender fees.

Interest-rate convention

Use the convention stated in the lender's documents. Market default uses Canadian semi-annual conversion for Canada and nominal-monthly planning math for the other supported markets.

Comparison type

Labels the scenario and interpretation. Enter every fee, penalty, credit, and cash-out amount explicitly.

Planned comparison horizon

How long you expect to keep the replacement loan or property. The tool also checks the full payoff paths for lasting break-even.

Estimated property value

Used only to estimate new loan-to-value. A lender's accepted valuation may differ.

Current mortgageModel the existing payment path, including a future rate change and mortgage-specific recurring costs.

Current mortgage balance

Use a recent lender balance or payoff statement before any exit charge.

Current annual interest rate

Enter the contractual rate used for payment accrual, not an APR or comparison rate that includes fees.

Current remaining term

Enter whole scheduled months remaining, not the original term.

Current principal-and-interest payment override

Leave at zero to calculate a payment. An override applies through a single-rate path or until a two-stage reset, must amortize the loan, and should come from the lender's statement.

Current rate structure

Use two stages when a fixed, teaser, or introductory rate changes before payoff.

Months until current rate changes

Number of modeled payments at the current rate before the follow-on rate begins.

Current follow-on annual rate

Planning rate after the current initial stage. It is an assumption unless the contract fixes that rate.

Current monthly mortgage costs

Recurring costs that change between scenarios, such as mortgage insurance or an account package. Exclude unchanged property tax and home insurance.

Current annual mortgage fee

Annual package, administration, or mortgage fee that would continue on the current loan.

Replacement mortgageEnter the quoted rate, term, optional payment override, rate stages, and recurring mortgage costs.

New initial annual interest rate

Use the quoted note rate or product rate used to calculate payments, not APR alone.

New mortgage term

Enter the full repayment term of the replacement loan. A longer term can lower payment while increasing lifetime cost.

New principal-and-interest payment override

Leave at zero to calculate a payment. An override applies through a single-rate path or until a two-stage reset, must amortize the loan, and should come from the written quote.

New rate structure

Use two stages for a fixed or introductory period followed by a modeled reversion rate.

New introductory-rate months

Number of modeled payments at the new initial rate before the follow-on rate begins.

New follow-on annual rate

Planning rate after the introductory stage. Replace promotional illustrations with a stress-tested assumption.

New monthly mortgage costs

Recurring mortgage-specific costs that change under the new loan. Do not add costs that remain identical in both scenarios.

New annual mortgage fee

Annual package, administration, or product fee attached to the new loan.

Penalties, fees, credits, and equitySeparate cash-paid and financed charges so closing cash and long-run interest are both visible.

Exit penalty paid in cash

Early-repayment charge, prepayment penalty, break cost, or discharge penalty paid without borrowing it.

Exit penalty added to new balance

Exit charge added to principal. This cost is counted once, while the model separately estimates interest caused by financing it.

Exit-penalty status

Canadian IRD, UK early-repayment charges, Australian break costs, and US prepayment terms can be lender-specific. Obtain a dated quote before acting.

Lender costs paid in cash

Application, arrangement, origination, underwriting, or product fees paid at closing.

Lender costs added to new balance

Lender fees rolled into principal rather than paid from cash.

Third-party costs paid in cash

Valuation, appraisal, legal, title, settlement, registration, discharge, or government costs paid in cash.

Third-party costs added to new balance

Eligible non-lender costs added to principal. Confirm that the lender will finance them.

Lender credit or switching cashback

Credit or cashback that actually offsets transaction costs. A higher rate offered in exchange still belongs in the rate input.

Cash released from equity

Additional principal received by the borrower. It raises payment and balance but is not mislabeled as a transaction cost.

New prepaid escrow or reserve deposit

Temporary cash deposit for tax, insurance, interest, or reserves. It affects closing liquidity but is not treated as a permanent refinancing cost.

Expected old escrow or reserve refund

Expected refund from the old account used as a modeled closing-liquidity offset. Enter zero unless the amount and timing are dependable; it is not an economic saving.

Guest calculations stay on this device. Signed-in results sync privately.

Your result

Net Savings at Your Horizon

Enter your values, then calculate to see a verified result.

Inputs usedReview the information used for this result.

Full calculation and sourcesOpen the full calculation to compare economic, lasting, and cash-flow break-even; balances; rate stages; financed costs; and term-reset risk.

Versioned calculationFormula v1.0.0

Three break-even views

Separate economic cost, lasting economic crossover, and cash-flow recovery instead of relying on closing costs divided by payment savings.

Country-aware rate math

Choose US, UK, Canada, or Australia and override the monthly conversion when lender documents use a different convention.

Term-reset warning

See the payment, remaining balances, full-term cost, and extra repayment months together.

Copy current termsUse the current balance, remaining months, contractual rate, payment, and penalty quote.Do not use the original loan amount

Enter the written replacement offerSeparate cash costs, financed costs, credits, recurring fees, and any cash out.Do not call rolled-in fees free

Test your actual horizonCompare break-even, balances, term change, and full-term cost before deciding.Stress the follow-on rate

Interpretation

under the entered assumptions.

A -1 break-even sentinel means the modeled path does not reach that crossover; the visible result translates it to Not reached.

Replace estimated penalties and costs with a dated lender payoff and written offer.

Use this result

Audit switching costs and feesCollect the exact charges that drive break-even.Check the term-reset riskSee why payment relief can extend debt and raise lifetime cost.Confirm the exit penaltyFind the correct ERC, IRD, prepayment penalty, or break-cost input.

Keep exploring

Method and test recordFormula v1.0.0

Recorded scope: pre-publication financial-calculation, content, and interaction review
Publisher: CalculatorGeek
Recorded review date: Not recorded
Next source review: Not scheduled
Definition fixtures: 12 configured scenarios
Published examples: 3 shown below

Recorded method

Independent derivation of monthly rate conversions and amortization paths; ordinary, zero-rate, financed-cost, credit, cash-out, term-reset, two-stage, and override vectors; JavaScript/PHP differential testing; rendered content and mobile/keyboard QA; primary-source recheck; and confirmation that every planned internal-link destination is live and canonical.

These records describe the published model and reference tests. A test-case count is not a certification of every possible input or an independent specialist review. Editorial policy

Known limitations

Educational planning estimate only; not a lender quote, approval, recommendation, legal opinion, or tax advice.
Obtain a current payoff and penalty quote and compare official loan disclosures before committing.
Future rates, property value, eligibility, tax effects, offset or redraw behavior, and daily lender accrual can change the decision.
A lower monthly payment can result from restarting or extending the term and does not by itself mean lower economic cost.

Method sources

Reference inputs and expected results

These published examples are separate from the configured definition fixtures and any additional automated assertions. Expected values use the stated output units; invalid inputs are intended to be rejected.

Case	Inputs	Expected result
Nominal monthly payment benchmark	300,000 principal, 6% nominal annual rate, 300 months	1,932.9042044565 monthly payment before rounding
Canadian semi-annual conversion benchmark	300,000 principal, 6% nominal rate compounded semi-annually, 300 months	1,919.4198710302 monthly payment before rounding
Financed-cost isolation	12,000 zero-rate balance plus 1,200 financed cost over 12 months	13,200 new principal, 1,100 payment, and zero interest caused by financing at a 0% rate

Report an issue with this tool. Include the page URL, units, expected answer, and steps to reproduce. Do not include sensitive personal information.

On this page

What this refinance break-even calculator tells you

This calculator compares keeping your current mortgage with a refinance, remortgage, lender switch, product transfer, or cash-out replacement month by month. It reports economic savings at your planned horizon, the first economic crossover, the first crossover that remains favorable through payoff, a cash-flow recovery point, both remaining balances, the term change, and the extra interest created by financed costs. That is more useful than dividing closing costs by the first-month payment reduction, because rates, balances, fees, and payments can change.

A positive result means the replacement path has lower modeled economic cost at the selected horizon under your inputs. It does not mean you qualify, the future rate will occur, or the transaction is suitable. Start with a current payoff and penalty quote and a written replacement offer.

How to compare a refinance, remortgage, or mortgage switch

Choose the market and rate convention. Use the convention in the lender's documents. Market default is a transparent planning shortcut, not a legal characterization of every product.
Copy the current loan accurately. Enter the current balance, remaining months, contractual rate, scheduled principal-and-interest payment if known, and any future rate change.
Build the new principal. Separate exit penalties, lender charges, third-party charges, credits, financed amounts, and cash released. A fee added to the balance still costs money and may generate interest.
Use a realistic horizon. Enter how long you expect to keep the property or replacement loan, not automatically the new mortgage term.
Read all three break-even results. Then compare balances, full-term savings, term change, and loan-to-value before treating payment relief as a win.

After checking the switch, use the Amortization Calculator to inspect a single confirmed repayment schedule in detail.

Method, formulas, and why balance matters

For a level monthly loan, the scheduled payment is M = P × i(1+i)ⁿ ÷ ((1+i)ⁿ − 1), where P is principal, i is the monthly rate, and n is scheduled months. At 0%, the payment is P ÷ n. Each month the engine applies interest, the payment, recurring mortgage costs, and any annual fee without rounding intermediate values. At an entered two-stage change, it applies the follow-on rate and recalculates the scheduled payment across the remaining term.

The central economic comparison is current interest and entered mortgage-specific costs minus new interest, entered mortgage-specific costs, and net transaction costs through the selected month. Principal repayment is not an expense: it changes equity. Cash released is additional borrowed principal, not income or savings. Prepaid escrow or reserves affect liquidity but are not treated as a permanent cost. This separation is why the result also shows both remaining balances.

For nominal-monthly math, i = j ÷ 12. For the Canadian semi-annual convention, i = (1 + j ÷ 2)^1/6 − 1. For an effective annual rate, i = (1 + j)^1/12 − 1. If a lender uses daily interest, an odd first period, or a different disclosed convention, use its payment quote and treat the schedule as an estimate.

Economic, lasting, and cash-flow break-even are different

Economic break-even month is the first month when cumulative interest and mortgage-specific cost savings recover the entered net transaction cost. Lasting break-even month is stricter: it is the first crossover after which the replacement path does not fall behind again through the modeled payoff paths. This matters when an introductory rate later reverts or when the new term is longer. Cash-flow break-even month tracks cash-paid economic transaction costs plus principal, interest, and entered recurring loan outflows, so it answers a budget question rather than a wealth-cost question. Temporary reserves and the expected reserve refund affect the separate closing-liquidity output, not crossover timing.

A replacement can cross once, lose the advantage after a rate change, and cross again later. The tool therefore uses a not reached result when a crossover does not occur within the modeled window and does not pretend that division by a negative or changing payment saving is meaningful.

US refinance, UK remortgage, Canadian penalty, and Australian switching notes

United States: compare Loan Estimates and Closing Disclosures. A so-called no-closing-cost refinance generally means a higher rate, lender credit, or costs added to the balance—not that costs disappear. United Kingdom: include the early-repayment charge, product fee, valuation, legal work, and any cashback; also compare a product transfer with an external remortgage. Canada: request the lender's prepayment penalty. It may use three months' interest or an interest-rate differential, and calculation methods vary. Australia: include discharge, application, valuation, settlement, registration, package, and possible fixed-rate break costs, then test any introductory and ongoing rates separately.

These notes guide data entry; they do not encode every law, contract, tax rule, or underwriting policy. The mortgage exit-penalty guide explains which number to obtain before relying on a result.

Worked examples: a simple crossing and a term-reset trap

Simple zero-rate audit: a 12,000 balance over 12 months produces a 1,000 monthly payment. If the replacement is also 12,000 at 0% for 12 months with 1,200 of cash-paid costs, the loan payments and balances match, but the replacement remains 1,200 behind because there is no interest saving to recover the cost. This boundary case confirms that the model counts a cost once rather than burying it in principal.

Term-reset trap: keep the same 12,000 balance and 0% rate but extend the replacement to 24 months. The payment falls from 1,000 to 500, yet after month 12 the current loan is paid off while the replacement still owes 6,000. There is no interest difference at 0%, so the lower payment is only slower principal repayment—not economic savings. Real interest makes an unnecessary term extension more costly.

How to interpret a positive or negative result

If Net savings at selected horizon is positive, confirm that the lasting break-even occurs before you expect to sell, move, refinance again, or repay. Then inspect the balances: a payment can be lower because the replacement balance includes fees or the term is longer. If the result is negative, the entered savings have not recovered the entered economic costs by that month. That does not prove the current mortgage is always better; change the horizon only when your plans genuinely support it.

Use Full-term savings as a long-run stress check, not as your only decision rule. A transaction can save over thirty years but fail during the five years you are likely to keep it. Likewise, a shorter term can be economically favorable while raising the required payment. Review affordability separately with the House Affordability Calculator.

Costs and credits to collect before calculating

Ask for a line-item quote covering any early-repayment charge, prepayment penalty, IRD, fixed-rate break cost, discharge or release fee, application or arrangement fee, origination and underwriting charges, valuation or appraisal, title or legal work, settlement or conveyancing, registration or government charges, and ongoing package fees. Record whether each amount is paid in cash or added to principal. Enter a lender credit or switching cashback only when the written offer confirms its amount and conditions.

Keep prepaid tax, insurance, interest, or reserve deposits separate from permanent transaction costs. A refund from the old account can arrive later; enter zero unless its amount and timing are dependable. For a deeper checklist, see mortgage switching costs and fees.

Assumptions, precision, and limitations

The model assumes monthly on-time payments and fully amortizing balances, retains full precision through every monthly step, and rounds only displayed currency, month, and percentage results. It does not model daily accrual, offset accounts, redraw facilities, payment holidays, extra payments, negative amortization, caps or floors, odd first periods, exchange rates, tax deductions, investment returns, opportunity cost, approval standards, or changes in property value. Entered follow-on rates are scenarios, not forecasts.

Market labels do not turn the tool into jurisdiction-specific advice. A lender can calculate a payoff, penalty, payment, or loan-to-value differently. Verify the result against current official disclosures and a lender's written quote; seek appropriately qualified advice when a decision depends on tax, legal, suitability, or contract interpretation.

Inputs, outputs and result meaning

Compares current and replacement mortgage paths without equating a lower payment with a lower cost.

Inputs

Market and currency: Displays USD, GBP, CAD, or AUD and selects a market-default rate conversion.
Interest-rate convention: Choose market default, nominal-monthly, Canadian semi-annual, or effective-annual conversion from the lender's documents.
Comparison type: Label the case as rate-and-term, cash-out, or product transfer.
Current mortgage balance: Outstanding principal before the entered exit charge.
Current annual interest rate: Contractual accrual rate, not APR.
Current remaining term: Whole scheduled months remaining.
Current principal-and-interest payment override: Optional lender payment; zero asks the model to calculate it.
Current rate structure: One rate or a two-stage path.
Months until current rate changes: Initial-stage payments before the current follow-on rate.
Current follow-on annual rate: Planning rate after the current first stage.
Current monthly mortgage costs: Mortgage-specific recurring costs that differ between paths.
Current annual mortgage fee: Annual fee that continues if the current loan is kept.
New initial annual interest rate: Initial contractual rate for the replacement path.
New mortgage term: Whole months in the replacement repayment term.
New principal-and-interest payment override: Optional quoted payment; zero asks the model to calculate it.
New rate structure: One rate or introductory and follow-on stages.
New introductory-rate months: Payments made at the new initial rate.
New follow-on annual rate: Planning rate after the introductory stage.
New monthly mortgage costs: Recurring replacement-loan costs that differ from the current path.
New annual mortgage fee: Annual replacement-loan package or administration fee.
Exit penalty paid in cash: Penalty paid without borrowing it.
Exit penalty added to new balance: Penalty financed in the replacement principal.
Lender costs paid in cash: Lender fees paid at closing.
Lender costs added to new balance: Lender fees rolled into principal.
Third-party costs paid in cash: Legal, title, appraisal, valuation, settlement, registration, or similar costs paid in cash.
Third-party costs added to new balance: Eligible non-lender costs financed in principal.
Lender credit or switching cashback: Written credit that offsets entered transaction costs.
Cash released from equity: Additional borrowed principal received by the borrower.
New prepaid escrow or reserve deposit: Temporary closing liquidity, not a permanent economic cost.
Expected old escrow or reserve refund: Modeled liquidity offset; use zero unless amount and timing are dependable.
Planned comparison horizon: Expected months before sale, payoff, or another refinance.
Estimated property value: Entered value used for the estimated replacement LTV.
Exit-penalty status: Records whether a penalty amount is confirmed, estimated, or not entered.

Outputs

Net savings at selected horizon: Current economic cost minus replacement economic cost through the selected month.
Current initial monthly payment: Calculated or overridden starting principal-and-interest payment.
New initial monthly payment: Calculated or overridden replacement starting payment.
Initial monthly payment saving: Current starting payment and entered monthly mortgage cost minus the equivalent new-path amounts; annual fees are reported elsewhere.
Average monthly outflow saving: Average modeled cash-outflow difference through the selected horizon.
Economic break-even month: First nonnegative cumulative economic-cost month, or not reached.
Lasting break-even month: First crossover that remains nonnegative through the modeled payoff comparison, or not reached.
Cash-flow break-even month: First modeled recovery of cash-paid economic transaction costs and loan outflows, or not reached; temporary reserves and refunds remain in Cash needed at closing.
Current balance at selected horizon: Modeled current principal still owed after the horizon payment.
New balance at selected horizon: Modeled replacement principal still owed after the horizon payment.
Current interest through selected horizon: Cumulative interest on the current path.
New interest through selected horizon: Cumulative interest on the replacement path.
Net transaction cost: Entered penalty and permanent transaction costs less lender credit, excluding cash-out principal and refundable reserves.
Cash needed at closing: Entered cash-paid costs and reserves, less credit and the expected refund entered as a liquidity offset.
New mortgage principal: Current balance plus financed penalties, financed costs, and cash released.
Interest caused by financed costs: Modeled extra interest attributable to costs added to principal.
Full-term savings: Economic-cost difference through both payoff paths.
Term change: New scheduled months minus current remaining months.
New loan-to-value ratio: New principal divided by entered property value.
Decision code: Internal numeric state used to present whether the replacement is ahead, lasting, temporarily ahead, or behind.

Sentinel contract: a break-even output of −1 means that crossover is not reached in the modeled comparison; the user-facing detail view must render “Not reached,” never a negative month.

Frequently asked questions

How do I calculate refinance break-even?

A basic estimate divides net closing costs by monthly payment savings, but that fails when balances, terms, fees, or rates change. This calculator instead compares month-by-month interest and mortgage-specific economic costs and also reports cash-flow recovery.

Why can a lower payment still be a worse refinance?

The replacement may restart or extend the term, add fees to principal, release cash, or use an introductory rate. Compare the balance and full-term cost, not only the first payment.

Should financed closing costs count twice?

No. The fee is one economic cost. Adding it to principal also creates interest, which the tool reports separately. Principal repayment itself is not counted as interest expense.

What penalty should I enter in Canada or the UK?

Enter a dated lender quote. Canadian prepayment penalties and interest-rate differentials and UK early-repayment charges depend on the contract and timing.

Does cashback make a mortgage switch free?

Not automatically. Subtract only confirmed cashback from eligible entered costs, then compare the offered rate, term, recurring fees, and conditions.

How should I model a fixed or teaser rate?

Choose a two-stage structure, enter its remaining or introductory months, and stress a reasonable follow-on rate. A lasting break-even is more informative than an early crossover that later reverses.

Is cash-out money counted as savings?

No. It is additional borrowed principal. The model includes its payment and interest effects without pretending the borrowed cash is an economic gain.

Primary and public-service sources

Sources and model boundaries were checked on 2026-10-07. CalculatorGeek Editorial Team reviewed and approved the full finance and insurance package on 2026-10-08. The cited organizations supplied source material; they did not review or endorse this CalculatorGeek package. Product terms, policy forms, laws, regulatory guidance and rates can change; current written documents and applicable authorities control.