How break-even works

Break-even answers one question: how long until the upfront cost of a decision is repaid by its monthly savings?

Break-even months = upfront cost ÷ monthly savings. A $6,000 cost that saves $200 a month breaks even in 30 months.

Use it for every trade-off

• Refinancing: closing costs ÷ true monthly savings.
• Paying points: point cost ÷ payment reduction from the lower rate.
• Taking a lender credit: run it in reverse; the credit is your upfront win, the higher payment is the monthly cost.

The two classic mistakes

• Comparing payments across different remaining terms. Restarting a 30-year clock always lowers the payment; it does not always lower the cost. Compare on the same payoff timeline.
• Counting escrow changes, skipped payments, or refunds as savings. Those are timing effects, not economics.

Your expected time in the home is the deciding input. That is why every option we show carries a holding-period lens rather than a one-size answer.