The simple refinance fee break-even answers one narrow question: how many months of payment reduction are needed to recover cash fees? It does not determine the cheapest loan over its lifetime.
Compare the same payment components
Use current and proposed principal-and-interest amounts. If one includes property taxes or insurance and the other does not, their difference is not a loan-payment saving. The planner derives the proposed payment from new balance, nominal rate and months.
Locate fees in the cash flow
This worksheet treats fees as paid upfront. Financed fees affect the balance and equity instead. A lender credit may be associated with a different interest rate. Record the quote structure rather than assuming that an advertised no-cost refinance has no economic cost.
Check the remaining term
Restarting a long term can lower the payment while leaving debt outstanding longer. Compare existing remaining payments with the proposed schedule, including the balance still owed at an expected exit date. Fee recovery alone does not measure lifetime interest savings or whether a refinance fits personal circumstances.
Worked example
Scroll the table horizontally on small screens to see every column.
| Item | Amount |
|---|---|
| Current monthly payment | 120 |
| New monthly payment | 100 |
| Upfront fees | 120 |
| Break-even | 120 / 20 = 6 months |
Six months recovers the cash fee under these assumptions, not necessarily the full economic cost.
Sources and checks
Examples are illustrative and can be checked with the linked tools. Read each tool’s assumptions before applying its result. How we verify methods.