The "break-even point" is the moment when the money you save from a lower mortgage payment covers the upfront cost of refinancing. Until you reach this month, you have technically lost money on the deal.
The formula is simple: Total Closing Costs ÷ Monthly Savings = Months to Break Even. For example, if it costs $4,000 to refinance and you save $200 per month, it will take you 20 months to break even. If you plan to move before month 20, refinancing is likely a bad financial decision.
When refinancing, be sure to include all fees in your "Total Closing Costs" input above. These often include: