Refinance Break Even Calculator
Enter your current loan and a refinance offer, and see the month your savings actually catch up to the closing costs — not just the back-of-envelope version.
Refinance Break-Even Calculator
Enter your current loan and a refinance offer, and see the month your savings actually catch up to the closing costs — not just the back-of-envelope version.
Date: 2026-09-01 Type: App Theme: Debt Status: Idea
What it is
A single-page browser app that compares a current loan (mortgage, auto, personal, or student) against a refinance offer and calculates two different break-even points: the standard "closing costs ÷ monthly savings" rule of thumb, and a month-by-month simulation that also accounts for how the new interest rate changes the amortization schedule itself. The two numbers often don't match, and the gap is the whole point.
Who it serves
Someone who got a refinance offer with a lower rate and wants to know if it's actually worth the closing costs before their next move, sale, or payoff. Not a generic "refinancing 101" explainer, a calculator that uses their real balance, rate, and term.
The money problem it addresses
Most refinance calculators divide closing costs by monthly savings and call it a day. That number is a reasonable first pass, but it breaks down the moment the new loan's term differs from the current loan's remaining term, which is common since many refinances reset a 25-year-remaining mortgage back to a fresh 30-year term. Stretching the term lowers the monthly payment even without much of a rate improvement. That makes the simple break-even look great while quietly leaving a larger balance owed at any given month than if the original loan had just kept running. This tool runs both loans forward month by month and compares total cost, payments made plus what's still owed, so a "savings" number that's really just deferred debt gets flagged instead of celebrated.
How it works
The user fills in the current loan (balance, APR, remaining term) and the refinance offer (new APR, new term, closing costs), plus how long they plan to keep the loan. A "load sample scenario" dropdown swaps in one of ten preset situations, including a mortgage where the new term resets longer and the refinance actually loses money over a short stay. On calculate, the app shows the new monthly payment, the payment difference, and both break-even numbers side by side, then plots cumulative true cost for both loans on a line chart so the crossover point is visible. A verdict banner states which loan is cheaper at the planned stay length and flags it explicitly when a "win" is coming from a longer term rather than a better rate.
What's in this folder
requirements.md— functional and technical requirements for the appindex.html— the app itself, opens directly in a browserstyle.css— stylingscript.js— amortization math, month-by-month simulation, and chart rendering (all client-side, integer-cent arithmetic)sample-data.json— ten synthetic refinance scenarios spanning mortgage, auto, personal loan, and student loan refinancescover-image.png— cover art for the library listingmetadata.md— generation metadata
How to run / read it
Open index.html in any modern browser. No build step, no server, no account. Pick a sample scenario from the dropdown to see it populated, or type in your own numbers.
Estimated impact
On the sample mortgage scenario ($320,000 balance, 7.25% → 6.71%, $9,600 closing costs, same term), the simple rule of thumb says break-even at 85 months; the term-adjusted simulation puts it at 67 months, an 18-month gap because the lower rate pays down principal faster than the flat monthly-savings math accounts for. On the "term reset trap" scenario, a rate drop from 6.10% to 5.90% paired with resetting a 300-month remaining term back to 360 months costs $6,375 more than keeping the current loan over a 36-month stay — a refinance the simple rule of thumb would have approved.
Good to know
This is a rate-and-term comparison, not a substitute for a lender's actual loan estimate — it doesn't model PMI changes, escrow, tax deductibility of mortgage interest, or cash-out refinancing. Sample rates and closing-cost ranges are grounded in the sources below as of September 2026; check current numbers before deciding. Not personalized financial or tax advice.
Sources
https://www.bankrate.com/mortgages/when-to-refinance/— closing cost range (2%–5% of loan amount), break-even formula, and the 0.75–1.0 percentage point rate-drop rule of thumbhttps://www.nerdwallet.com/mortgages/mortgage-rates— current average refinance rates referenced for realistic sample scenarios (30-year 6.71%, 15-year 6.21%, as of September 1, 2026)
Requirements
Requirements — Refinance Break-Even Calculator
Functional Requirements
- FR-1 User enters a current loan: loan type (Mortgage / Auto / Personal / Student, label only), current balance ($), current APR (%), and remaining term (months).
- FR-2 User enters a refinance offer: new APR (%), new term (months), and closing costs ($). A helper button fills closing costs to 3% of the current balance (midpoint of the typical 2%–5% range) as a starting estimate.
- FR-3 User enters how many months they plan to keep the loan (the "plan to stay" horizon) before selling, paying it off early, or refinancing again.
- FR-4 App computes the new loan's amortized monthly payment from balance, new APR, and new term using the standard amortization formula, and reports the monthly payment difference against the current loan.
- FR-5 App reports two break-even figures:
- Simple break-even — closing costs ÷ monthly savings (the standard industry rule of thumb).
- Term-adjusted break-even — the month at which cumulative true cost (payments made so far + upfront closing costs + remaining balance still owed) for the new loan first drops below the current loan's, found by simulating both loans month-by-month. This can diverge from the simple break-even even when the term doesn't change, because it accounts for how much faster the new (lower) rate pays down principal each month rather than just the flat monthly-payment difference. The gap is largest when the new term also resets longer or shorter than the current loan's remaining term.
- FR-6 A verdict banner compares true cost for both loans at the user's "plan to stay" horizon and states which loan is cheaper and by how much, or flags a "resets your term" warning when the new loan's remaining balance at the horizon is meaningfully higher than the current loan's despite a lower rate.
- FR-7 A Chart.js line chart plots cumulative true cost (payments made + remaining balance owed, with closing costs added upfront for the new loan) for both loans over time, so the crossover point is visible.
- FR-8 A "Load sample scenario" control cycles through 10 preset scenarios (
sample-data.json) spanning mortgage, auto, personal loan, and student loan refinances, including at least one scenario where refinancing does not pay off within the planned stay. - FR-9 A rule-of-thumb note states that a rate drop of at least 0.75–1.0 percentage points is generally needed to offset closing costs within about two years (sourced from Bankrate — see README Sources).
- FR-10 Invalid or missing inputs (non-positive balance, non-positive term, non-positive APR bound, monthly savings ≤ 0 for break-even math) are handled without throwing: break-even shows "Never — payment doesn't decrease" instead of a bogus number.
Technical Requirements
- TR-1 Single-page app —
index.htmlopens directly fromfile://in any modern browser with no build step, server, or API keys. - TR-2 All monetary arithmetic uses integer cents (dollar inputs multiplied by 100 and rounded) to avoid binary-floating-point drift. Dollar display is formatted at output only via
toLocaleString. - TR-3 External CDN dependency:
chart.js@4.4.7viahttps://cdn.jsdelivr.net/npm/chart.js@4.4.7/dist/chart.umd.min.js. No other third-party libraries. - TR-4 Month-by-month amortization simulation includes a hard safety cap of 480 months (40 years).
- TR-5 Existing Chart.js instance is destroyed before re-rendering to prevent canvas memory accumulation.
- TR-6 No cash-out modeling — the new loan's principal always equals the current loan's balance (rate-and-term refinance only), matching how the standard break-even rule of thumb is defined.
- TR-7 Closing costs are modeled as paid out of pocket at closing, not rolled into the new loan balance.
Non-Requirements
- No real account connections, OAuth flows, or third-party rate-quote API calls.
- No persistent storage — session-only state.
- No server-side computation.
- No personalized financial, investment, or tax advice output; no recommendation to use a specific lender.
- Does not model tax deductibility of mortgage interest, PMI removal/addition, or escrow changes.
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