Mortgage Refinance Calculator: Break-Even and Total Savings

Mortgage refinancing: break-even point and real savings

The break-even point of a refinance is the cost of the operation divided by the drop in monthly payment: 4,500 in fees against 382 saved per month are recovered in 12 months. The tool also compares the interest still owed on the old loan with the interest of the new one, fees included, to measure the total gain.

Formulas used

Both monthly payments (principal and interest, insurance excluded) follow the fixed-rate amortising loan formula: M = C × i × (1 + i)ⁿ ÷ ((1 + i)ⁿ − 1), where i is the annual rate divided by 12 and n the number of months. The new principal is the outstanding balance, plus the fees if you roll them into the loan and any cash-out amount. The break-even point is fees ÷ monthly saving, rounded up to the next month. Total savings compare the interest still due on the current loan with the interest on the new loan plus the fees.

Example with the default values

A 320,000 balance at 6.75% with 27 years left costs 2,149 a month, with 376,316 of interest still to pay. Refinancing at 5.25% over 30 years with 4,500 of fees paid upfront gives a payment of 1,767, a saving of 382 a month. The fees are recovered in 12 months and total savings reach 55,677. If you keep the remaining 27 years at the new rate, the payment drops less (1,850, so 300 saved and a 16-month break-even), but total savings rise to 92,553 because you pay three fewer years of interest.

The tool rates the deal as strong when break-even takes 36 months or less, as a medium-term case beyond that, and advises against it when the payment does not fall.

What the tool leaves out

• Early repayment penalties, loan guarantees and broker fees: add them to the fees field yourself.
• Borrower insurance, which can matter as much as the rate.
• Discounting: a saving in twenty years counts as much as one today.

For a US mortgage with discount points, the dedicated US refinance simulator fits better. This is an estimate and does not replace a loan offer or advice from a broker or adviser.

Sources and dates: under French law, the early repayment penalty on a home loan cannot exceed six months of interest on the repaid capital at the loan's average rate, nor 3% of the outstanding balance (Consumer Code, article R313-25, wording from decree 2016-884, in force since 1 July 2016); no penalty is due when the repayment follows the sale of the home after a job relocation, job loss or death (service-public.gouv.fr, sheet F1669) (checked on 14/10/2026).

Frequently Asked Questions

How do I calculate the break-even point of a mortgage refinance?

Divide the total fees (application, guarantee, early repayment penalty, broker) by the drop in monthly payment, then round up to the next month. With 4,500 of fees and 382 saved per month, break-even is 12 months. If you sell or repay before that date, the refinance costs you money.

What is the maximum early repayment penalty on a French home loan?

In France, the penalty on a home loan cannot exceed six months of interest on the repaid capital at the loan's average rate, nor 3% of the outstanding balance (Consumer Code, article R313-25). On 320,000 at 6.75%, six months of interest come to 10,800, so the 3% cap of 9,600 applies. No penalty is due when the repayment follows the sale of the home after a job relocation, job loss or death.

Should I extend the loan term when refinancing?

A longer term lowers the payment but adds years of interest. In the default example, refinancing over 30 years saves 382 a month and 55,677 in total; keeping the remaining 27 years saves only 300 a month but 92,553 in total. Compare both results before choosing.

Is it better to pay the fees upfront or roll them into the new loan?

Rolled into the loan, the fees need no cash upfront but accrue interest for the whole term. With the default values, the payment goes from 1,767 to 1,792, break-even from 12 to 13 months and total savings from 55,677 to 51,231.

Is this tool really free?

Yes, all tools on Kristools are 100% free and accessible without registration.

Is my data protected?

Yes. All processing is performed directly and securely inside your browser. No personal data is sent to our servers.