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Refinance Break-Even Calculator

Find the break-even point of refinancing a mortgage or loan: refinance cost ÷ monthly saving gives the months to break even.

Input Data

Current Balance
HK$
Old Rate Percent
%
Old Remaining Years
yr
New Rate Percent
%
New Term Years
yr
Closing Costs
HK$
Upfront Fee Percent
%

Results

Refinance cost divided by the monthly saving.
14months
Old payment minus new payment.
HK$220.9
The current monthly instalment.
HK$1,432.86
The instalment after refinancing.
HK$1,211.96
Closing costs plus the upfront fee on the new balance.
HK$3,000

At a glance:Refinancing breaks even when the monthly savings repay the refinance cost. Monthly saving = old payment − new payment; refinance cost = closing costs + new balance × upfront fee%; break-even months = refinance cost ÷ monthly saving. Stay longer than that and you come out ahead.

Formula

Monthly saving = old payment − new payment.

Refinance cost = closing costs + new balance × upfront fee%.

Break-even months = refinance cost ÷ monthly saving.

$$\text{Break-Even Months} = \left\lceil \dfrac{\text{Refinance Cost}}{\text{Monthly Savings}} \right\rceil$$
$$\text{Monthly Payment} = P \cdot \dfrac{r(1+r)^n}{(1+r)^n - 1}$$

How to Use

  1. Enter the current balance, old and new rates and terms.
  2. Enter the closing costs and the upfront fee percent.
  3. Read the break-even months, monthly saving and payments.

FAQ

What does the break-even point mean?

It is the moment when the cumulative monthly savings from refinancing exactly offset all the refinancing costs. Only after the break-even point do you actually start saving money. If you plan to hold the property or loan for less time than the break-even months, refinancing may not be worthwhile.

Why can total interest rise even when the monthly payment falls?

If the new loan term is longer than the old loan's remaining term, the monthly payment drops but the longer repayment period increases total interest. So beyond the monthly saving, also watch the overall interest cost and any term change.

What are the common costs of refinancing (remortgaging)?

Typical costs include legal fees, valuation fees, the early-repayment penalty on the old loan (within the penalty period), mortgage-insurance adjustments and bank handling charges. Enter these under closing costs and upfront fee to estimate the break-even time more accurately.

Do Hong Kong cash rebates affect the break-even calculation?

Yes. Hong Kong banks often offer cash rebates (usually a percentage of the new loan) that can offset part or all of the refinancing cost — effectively lowering the total refinance cost and bringing forward or even instant break-even. But banks usually impose a rebate lock-in period (commonly 2–3 years); if you redeem or remortgage within it, you must refund the rebate proportionally, so factor that potential refund into the calculation.

Should I watch the penalty period before remortgaging?

Yes. Hong Kong mortgages usually have a penalty period (typically the first 2–3 years); redeeming the old loan to remortgage within it triggers a penalty (commonly 1%–3% of the loan). That penalty should be counted in the closing costs, or you will understate the break-even time. Generally it pays to wait until the old mortgage has passed the penalty period and the rate gap is clearly meaningful.

Related Tools

References

Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.

Found a problem with the results?

If this calculator's result is wrong, or you have any question about the calculation logic, please let us know. You are viewing:Refinance Break-Even Calculator（/finance/refinance-break-even）。