Loans & Debt
Break-even months
How long the monthly saving takes to recover the closing costs.
The Formula
Break-even = costs / monthly saving
How long the monthly saving takes to recover the closing costs.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| C | Closing costs | currency | Total cost of refinancing. |
| S | Monthly saving | currency | Old payment minus new payment. |
What Each Symbol Means
Ccurrency
Closing costs
Total cost of refinancing.
Scurrency
Monthly saving
Old payment minus new payment.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate refinance savings page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Refinance Savings, filed under Finance. Every number the guide produces comes from substituting into this one line.